Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
26 Jun 2025
Case Brief
By an order dated June 23, 2025, RBI imposed a penalty on The Karimnagar District Co-operative Central Bank Ltd., Telangana after a statutory inspection by NABARD and subsequent supervisory proceedings. RBI found that the bank had sanctioned loans to its directors, constituting contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Act.
Why RBI Acted
RBI imposed a monetary penalty after supervisory findings and consideration of the bank’s reply and oral submissions. The contravention sustained was that the bank had sanctioned loans to its directors, violating Section 20 read with Section 56 of the Banking Regulation Act, 1949. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must absorb the monetary penalty of ₹1 lakh; the order does not itself impose any new operational restriction or withdrawal of business activity. The finding concerns compliance with director-loan restrictions under the Banking Regulation Act and may leave the bank exposed to further RBI action if warranted.
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 Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 23 Jun 2025
- Effective From
- 23 Jun 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank