Document title: RBI imposes monetary penalty on Kolhapur District Central Co‑op Bank Ltd.
Issuing authority: Reserve Bank of India
Reference number: Press Release No. 2026-2027/717
Date: 17 July 2026
Regulatory and Policy Measures
The RBI, by order dated 17 July 2026, imposed a monetary penalty of ₹13.30 lakh on Kolhapur District Central Co‑op Bank Ltd., Maharashtra, for non‑compliance with provisions of Section 20(1) read with Section 56 of the Banking Regulation Act, 1949. The penalty was exercised under the RBI’s powers under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Act.
The statutory inspection was conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to the bank’s financial position as on 31 March 2025. Following the inspection, a notice was issued to the bank seeking its explanation. After considering the bank’s reply and oral submissions at a personal hearing, the RBI sustained the charge that the bank had sanctioned director‑related loans, constituting a breach of statutory compliance.
The RBI clarified that the penalty does not adjudicate the validity of any transaction with customers and is without prejudice to any further action that may be initiated against the bank.
Banking and Credit
The identified breach relates to the sanctioning of loans to the bank’s directors, a prohibited activity under the Banking Regulation Act. This regulatory finding underscores deficiencies in the bank’s credit underwriting and governance practices.
The RBI’s action reinforces its supervisory stance on director‑related lending and signals that cooperative banks must adhere strictly to statutory lending norms, with the possibility of additional regulatory measures if non‑compliance persists.