These actions are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, July 22, 2025: The Reserve Bank of India (RBl) has imposed monetary penalty on 4 co-operative banks. The Reserve Bank of India (RBl) has imposed a monetary penalty of Rs2 lakh (Rupees Two Lakh only) on The Shahada Peoples Co-operative Bank Ltd., Shahada, Maharashtra; Rs6 lakh (Rupees Six Lakh only) on Motiram Agrawal Jalna Merchants Co-operative Bank Limited, Jalna, Maharashtra; Rs20,000 (Rupees Twenty Thousand only) on Sahyadri Sahakari Bank Ltd., Mumbai, Maharashtra and Rs1 lakh (Rupees One Lakh only) on The Government Employees Co-operative Bank Limited, Dharwad, Karnataka. These actions are based on deficiencies in regulatory compliance
1 The Reserve Bank of India (RBl) has, by an order dated July 16, 2025, imposed a monetary penalty of Rs2 lakh (Rupees Two Lakh only) on The Shahada Peoples Co-operative Bank Ltd., Shahada, Maharashtra (the bank), for non-compliance with certain directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters - 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, 2024. 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 regularised certain Non-Performing Accounts (NPAs) without repayment through genuine sources.
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.
2 The Reserve Bank of India (RBl) has, by an order dated July 16, 2025, imposed a monetary penalty of Rs6 lakh (Rupees Six Lakh only) on Motiram Agrawal Jalna Merchants Co-operative Bank Limited, Jalna, Maharashtra (the bank) for non-compliance with certain directions issued by RBI on ‘Loans and advances to directors, relatives and firms / concerns in which they are interested’ and ‘Limits on exposure to single and group borrowers / parties and large exposures and Revision in the target for priority sector lending - 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, 2024. 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 charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had sanctioned:
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.
3 The Reserve Bank of India (RBI) has, by an order dated July 18, 2025, imposed a monetary penalty of Rs20,000 (Rupees Twenty Thousand only) on Sahyadri Sahakari Bank Ltd., Mumbai, Maharashtra (the bank) for non-compliance with the specific directions issued by RBI under Supervisory Action Framework (SAF). 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.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2024. 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 charge against the bank was sustained, warranting imposition of monetary penalty:
The bank had not reduced single borrower exposure limit, for fresh loans and advances, by 50% of the applicable regulatory limit in non-adherence to directions under SAF.
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 monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
4 The Reserve Bank of India (RBI) has, by an order dated July 17, 2025, imposed a monetary penalty of Rs1 lakh (Rupees One Lakh only) on The Government Employees Co-operative Bank Limited, Dharwad, Karnataka (the bank) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’ and ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative 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, 2024. 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:
The bank had:
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.
