Recorded RBI impact
Fine: Rs 45,000
Monetary penalty · Fresh imposition
Published by RBI
28 Aug 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Nanded District Central Co-operative Bank Ltd., Maharashtra after supervisory examination and follow-up proceedings found breaches of RBI directions. RBI said the bank had not complied with directions on KYC and membership of Credit Information Companies by co-operative banks, including failing to deploy a robust software system to flag suspicious transactions and failing to furnish borrower credit information to all four CICs. The penalty was imposed under the Banking Regulation Act and the Credit Information Companies (Regulation) Act.
Why RBI Acted
RBI imposed a monetary penalty after NABARD's statutory inspection found non-compliance with RBI directions on Know Your Customers (KYC) and Membership of Credit Information Companies (CICs) by Co-operative Banks. The sustained charges included failure to implement robust software for generating alerts to identify suspicious transactions and failure to submit credit information of borrowers to all four CICs. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 and Section 25 of the CIC Act, 2005.
Operating Impact
The bank must absorb the monetary penalty and address the supervisory weaknesses identified by RBI. Forward-looking, it is expected to strengthen KYC/AML alert systems and ensure complete reporting of borrower credit information to all CICs; the order itself does not impose a business restriction or withdrawal of operations.
Regulatory Basis
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
- Section 25 of the Credit Information Companies (Regulation) Act, 2005
Action Facts
- Primary Impact
- Fine: Rs 45,000
- Order Date
- 22 Aug 2025
- Effective From
- 22 Aug 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank