This action is based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, 26 June 2026: The Reserve Bank of India (RBI) has, imposed monetary penalties on 3 cooperative banks.
RBI imposes monetary penalty on The Nabapalli Cooperative Bank Limited, West Bengal
The Reserve Bank of India (RBI) has, by an order dated June 22, 2026, imposed a monetary penalty of Rs3 lakh (Rupees Three Lakh only) on The Nabapalli Cooperative Bank Limited, West Bengal (the bank) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of 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 conducted by the RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty:
The bank had failed to upload the KYC records of customers onto the Central KYC Records Registry (CKYCR) within the prescribed timeline.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
RBI imposes monetary penalty on The Modern Co-operative Bank Limited, Chalisgaon, Maharashtra
The Reserve Bank of India (RBI) has, by an order dated June 23, 2026, imposed a monetary penalty of Rs1 lakh (Rupees One Lakh only) on The Modern Co-operative Bank Limited, Chalisgaon, Maharashtra (the bank) for non-compliance with certain directions issued by RBI on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of 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 conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
breached prescribed regulatory limit for single borrower exposure; and
failed to upload the KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
RBI imposes monetary penalty on The Lalgudi Co-operative Urban Bank Ltd., Tamil Nadu
The Reserve Bank of India (RBI) has, by an order dated June 22, 2026, imposed a monetary penalty of Rs1 lakh (Rupees One Lakh only) on The Lalgudi Co-operative Urban Bank Ltd., Tamil Nadu (the bank) for non-compliance with certain directions issued by RBI on ‘Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks (UCBs)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of 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 conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
Despite its CRAR being less than the regulatory minimum, the bank had:
allowed the refund of share capital to its members and
sanctioned certain loans without complying with the share linking to borrowings norms.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
