Document title: RBI imposes monetary penalty on The Chittoor District Co‑operative Central Bank Ltd.
Issuing authority: Reserve Bank of India (RBI)
Reference number: Press Release: 2026-2027/511
Date: June 22, 2026 (order dated June 15, 2026)
Banking and Credit
The Reserve Bank of India, acting on a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) that examined the bank’s financial position as of March 31, 2025, identified that The Chittoor District Co‑operative Central Bank Ltd. had sanctioned loans to its directors. This activity was deemed a contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. Following the inspection, RBI issued a notice requiring the bank to show cause why a penalty should not be imposed. After reviewing the bank’s written reply and oral submissions made during a personal hearing, RBI sustained the charge of director‑related loan sanction.
Regulatory and Policy Measures
Pursuant to the powers conferred under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, RBI imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on the bank. The RBI clarified that the penalty addresses deficiencies in statutory compliance and does not constitute a judgment on the validity of any transaction or agreement entered into by the bank with its customers. The imposition of the penalty is expressly without prejudice to any other regulatory or enforcement action that RBI may initiate against the bank in the future.
The press release, signed by the Chief General Manager Brij Raj, underscores RBI’s commitment to enforcing compliance with banking regulations and signals that further supervisory actions may follow if deficiencies persist.