Document title: RBI imposes monetary penalty on Mandya District Co‑operative Central Bank Ltd., Karnataka
Issuing authority: Reserve Bank of India (RBI)
Reference number: Press Release: 2026-2027/740
Date: 23 July 2026
Banking and Credit
The RBI, by an order dated 17 July 2026, imposed a monetary penalty of ₹50,000 (Rupees Fifty thousand only) on Mandya District Cooperative Central Bank Ltd., Karnataka. The penalty is for contravention of provisions of section 19 read with section 56 of the Banking Regulation Act, 1949 (BR Act). The RBI exercised powers conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
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. Following supervisory findings of statutory non‑compliance, the RBI issued a notice to the bank asking it to show cause why a penalty should not be imposed. After considering the bank’s written reply and oral submissions made during a personal hearing, the RBI sustained the charge that the bank had held shares in other co‑operative societies, which is a breach of the BR Act.
Regulatory and Policy Measures
The RBI clarified that this monetary penalty is based solely on deficiencies in statutory compliance and is not intended to pass judgment on the validity of any transaction or agreement entered into by the bank with its customers. The imposition of the penalty is without prejudice to any other action that the RBI may initiate against the bank in the future.
The press release is signed by the Chief General Manager, Brij Raj.
This document underscores the RBI’s enforcement of compliance under the Banking Regulation Act and signals that cooperative banks must adhere strictly to statutory provisions concerning shareholding in other cooperative entities.