Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Oct 2025
Case Brief
RBI, by order dated October 22, 2025, imposed a monetary penalty of ₹1 lakh on The Tumkur District Co-operative Central Bank Limited, Karnataka. The penalty was imposed after NABARD’s statutory inspection and subsequent supervisory proceedings found that the bank had sanctioned a loan to one of its directors, contrary to Section 20 read with Section 56 of the Banking Regulation Act, 1949. RBI noted that the action was for deficiencies in statutory compliance and did not pronounce on the validity of any transaction or agreement.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection by NABARD and supervisory findings indicated contravention of statutory provisions. The sustained charge was that the bank had sanctioned a loan to one of 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 and ensure future compliance with restrictions on lending to directors and related statutory provisions. The order does not by itself impose an operational restriction, but RBI may initiate other action if further non-compliance is found.
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
- 22 Oct 2025
- Effective From
- 22 Oct 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank