Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
29 Dec 2025
Case Brief
RBI imposed a monetary penalty on The District Co-operative Central Bank Ltd., Warangal, Telangana, after a statutory inspection by NABARD found that the bank had sanctioned director-related loans, contrary to Section 20 read with Section 56 of the Banking Regulation Act, 1949. After a show-cause process and hearing, RBI concluded that the charge was sustained and levied the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection by NABARD found that the bank had sanctioned loans related to its directors, which was treated as a contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and then sustained the charge under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must bear the ₹1 lakh penalty, and the finding signals supervisory concern over related-party lending compliance. The release does not describe any immediate operational restriction, but RBI has indicated the action is without prejudice to any further proceedings it may initiate.
Regulatory Basis
- Section 20 read with Section 56 of the Banking Regulation Act, 1949
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 26 Dec 2025
- Effective From
- 26 Dec 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank