RBI Hits Co-operative Bank with Monetary Fine After Statutory Breach of Banking Act
The Reserve Bank of India (RBI) has imposed a monetary penalty on The Chittoor District Co-operative Central Bank Ltd., Andhra Pradesh. The action stems from the bank's contravention of key provisions related to statutory compliance under banking regulations.Details of Penalty Imposed by RBI
The RBI issued an order dated June 15, 2026, imposing a fine amounting to ₹1 lakh (Rupees One Lakh only). This penalty was levied against The Chittoor District Cooperative Central Bank Ltd., Andhra Pradesh.The imposition of the monetary penalty is executed in exercise of powers conferred on the RBI under specific sections of the Banking Regulation Act, 1949 (BR Act). These sections include Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Director Loan Irregularities Lead to Fine
The basis for the penalty relates to deficiencies noted during a statutory inspection of the bank. This review was conducted by the National Bank for Agriculture and Rural Development (NABARD). The findings were based on the bank's financial position as recorded up to March 31, 2025.After considering the bank’s response to the notice and oral submissions during a personal hearing, the RBI confirmed that the charge against the institution was sustained. The specific violation identified was that the bank had sanctioned director related loans.
Regulatory Position and Future Actions
The RBI confirmed that this action is purely based on deficiencies in statutory compliance regarding the specified provisions of the BR Act. This penalty does not seek to pronounce upon the validity of any transaction or agreement made by the bank with its customers.Furthermore, the Press Release clarifies that the imposition of this monetary penalty is done without prejudice to any other action that may be initiated subsequently by the RBI against The Chittoor District Co-operative Central Bank Ltd.
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