Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
28 Aug 2025
Case Brief
By an order dated August 19, 2025, RBI imposed a monetary penalty of ₹1.00 lakh on The Vijayapura District Central Co-operative Bank Ltd., Karnataka. The penalty was imposed after supervisory inspection findings showed contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949, specifically that the bank had sanctioned a loan to its director. RBI stated that the action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act, and that it does not pronounce on the validity of any transaction or agreement entered into by the bank.
Why RBI Acted
RBI imposed a monetary penalty because the bank was found to have contravened Section 20 read with Section 56 of the Banking Regulation Act, 1949. The supervisory findings sustained the charge that the bank had sanctioned a loan to its director, and 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 penalty and address the compliance lapse identified by RBI. The order does not impose an operational restriction, but RBI noted that the monetary penalty is without prejudice to any other action that may be initiated in future.
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
- 19 Aug 2025
- Effective From
- 19 Aug 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank