Document title: RBI imposes monetary penalty on The Chitradurga District Co-operative Central Bank Ltd.
Issuing authority: Reserve Bank of India (RBI)
Date: 18 June 2026
Banking and Credit
The Reserve Bank of India, by an order dated 15 June 2026, imposed a monetary penalty of ₹1.50 lakh (Rupees One Lakh Fifty Thousand only) on The Chitradurga District Co-operative Central Bank Ltd., Chitradurga, Karnataka. The penalty is imposed under the powers conferred by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was carried out by the National Bank for Agriculture and Rural Development (NABARD) with reference to the bank’s financial position as on 31 March 2025. The inspection identified contraventions of statutory provisions and non‑compliance with RBI directions on Know Your Customer (KYC). Consequently, RBI issued a notice to the bank requiring it to show cause why the penalty should not be imposed. After considering the bank’s reply and oral submissions made during a personal hearing, RBI sustained the following charges: (i) sanctioning of director‑related loans, and (ii) failure to upload customer KYC records onto the Central KYC Records Registry (CKYCR) within the prescribed timeline.
Regulatory and Policy Measures
The RBI clarified that the imposition of the monetary penalty is based solely on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. The penalty is imposed without prejudice to any other action that may be initiated by the RBI against the bank in the future.
The action underscores RBI’s commitment to enforce compliance with KYC norms and to curb the sanctioning of loans to directors, thereby strengthening governance standards within cooperative banks.