Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Sept 2025
Case Brief
By an order dated September 15, 2025, RBI imposed a monetary penalty of Rs 1 lakh on Yavatmal District Central Co-operative Bank Ltd., Maharashtra. The action followed a NABARD statutory inspection and subsequent supervisory proceedings in which RBI found that the bank had sanctioned loans related to its directors, violating Section 20 read with Section 56 of the Banking Regulation Act, 1949. RBI said the penalty was imposed under Section 47A(1)(c) and Section 46(4)(i) read with Section 56 of the BR Act.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection by NABARD and a show-cause process found a sustained charge that the bank had sanctioned loans related to its directors. RBI cited contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949, and exercised powers under Section 47A(1)(c) and Section 46(4)(i) read with Section 56 of the BR Act.
Operating Impact
The bank must absorb the monetary penalty and address the compliance lapse that led to it. The action does not itself restrict current banking operations, but it signals supervisory concern and may expose the bank to further RBI action if similar violations continue.
Regulatory Basis
- Section 20 read with Section 56 of the Banking Regulation Act, 1949
- Section 47A(1)(c)
- Section 46(4)(i) read with Section 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 15 Sept 2025
- Effective From
- 15 Sept 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank