Recorded RBI impact
Fine: Rs 2.50 L
Monetary penalty · Fresh imposition
Published by RBI
11 Aug 2025
Case Brief
RBI, by order dated August 07, 2025, imposed a monetary penalty of ₹2.50 lakh on The Nalgonda District Co-operative Central Bank Ltd., Telangana. The penalty was imposed after NABARD’s statutory inspection found contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. RBI stated that the sustained charge was the bank’s sanctioning of loans to its directors, and the penalty was levied 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 a sustained contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. The bank had sanctioned loans to its directors, and RBI concluded this warranted penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must bear the monetary penalty, but the release does not describe any new operational restriction, suspension, or licensing action. The finding may also expose the bank to any further action RBI may choose to initiate separately.
Regulatory Basis
- Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act)
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 2.50 L
- Order Date
- 7 Aug 2025
- Effective From
- 7 Aug 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank