The Reserve Bank of India (RBI) has, by an order dated September 25, 2024, imposed a monetary penalty of ₹2.00 lakh (Rupees Two Lakh only) on Sindhudurg District Central Co-operative Bank Limited, Maharashtra for violation of Section 20 of Banking Regulation Act, 1949 (BR Act) read with Section 56 of the Act. This penalty has been imposed in exercise of powers vested in RBI, 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 conducted by NABARD with reference to its financial position as on March 31, 2023. Based on supervisory findings of contravention of statutory provision 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 provision of the BR Act. After considering the bank’s reply to the notice, and oral submissions made during the personal hearing, RBI found, inter alia, that the charge of sanctioning loans to its directors was sustained, warranting imposition of monetary penalty.

This action is based on the 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.

(Puneet Pancholy)     
Chief General Manager

Press Release: 2024-2025/1236