Document title: RBI imposes monetary penalty on Kedarnath Urban Co-operative Bank Ltd., Latur, Maharashtra
Issuing authority: Reserve Bank of India
Reference number: Press Release: 2026-2027/826
Date: August 6, 2026
Regulatory and Policy Measures
The Reserve Bank of India, by an order dated August 03, 2026, imposed a monetary penalty of ₹40,000 (Rupees Forty Thousand only) on Kedarnath Urban Co-operative Bank Ltd., Latur, Maharashtra for non‑compliance with RBI directions on Know Your Customer (KYC) and operational instructions under the Supervisory Action Framework (SAF). 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.
A statutory inspection of the bank was conducted with reference to its financial position as on March 31, 2025. Following the inspection, RBI issued a notice to the bank asking it to show cause why a penalty should not be imposed for its failure to comply with the directions. After considering the bank’s written reply, additional submissions and oral arguments made during a personal hearing, RBI sustained the charges that the bank (i) failed to upload KYC records of customers onto the Central KYC Records Registry (CKYCR) within the prescribed timeline, and (ii) offered interest rates on certain deposits higher than those offered by the State Bank of India, contrary to SAF directions.
Banking and Credit
The RBI clarified that this action is based solely on deficiencies in regulatory compliance and does not prejudice the validity of any transaction or agreement entered into by the bank with its customers. The monetary penalty is imposed without prejudice to any other action that may be initiated by RBI against the bank.
The RBI’s enforcement underscores its continued focus on strict adherence to KYC norms and supervisory directives to ensure stability and integrity in the cooperative banking sector. This content may not be financially relevant.