**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹29.60 lakh on DCB Bank Limited for non-compliance with RBI directions regarding loan-to-value (LTV) ratios for non-agricultural gold loans. The order, dated February 06, 2026, follows a Statutory Inspection for Supervisory Evaluation (ISE 2025) conducted with reference to the bank's financial position as of March 31, 2025. The penalty is imposed under provisions of the Banking Regulation Act, 1949.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI imposed a penalty of ₹29.60 lakh on DCB Bank Limited.
* The penalty was issued on February 06, 2026.
* **Reason for Penalty:**
* The penalty is for non-compliance with certain RBI directions regarding loans extended against gold ornaments and jewellery for non-agricultural uses.
* Specifically, the bank failed to maintain the prescribed loan-to-value (LTV) ratio.
* **Legal Basis:**
* The penalty is imposed under Section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.
* **Inspection and Notice:**
* The Statutory Inspection for Supervisory Evaluation (ISE 2025) was conducted with reference to the bank's financial position as of March 31, 2025.
* RBI issued a notice to DCB Bank advising it to show cause as to why a penalty should not be imposed.
* **Clarification:**
* The action is based on deficiencies in statutory compliance.
* The penalty is without prejudice to any other action that may be initiated by RBI against the bank.
**Impact Analysis**
**DCB Bank Limited**
* **Impact:**
* Financial penalty of ₹29.60 lakh.
* Potential reputational damage.
* Scrutiny of existing gold loan practices.
* **Action Required:**
* Pay the monetary penalty.
* Review and rectify non-compliant lending practices to ensure adherence to RBI's LTV directives.
* Implement measures to prevent future non-compliance.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator imposing the monetary penalty and conducting the inspection.
DCB Bank Limited: The bank on which a monetary penalty was imposed.
Banking Regulation Act, 1949: The act under which the penalty was imposed; specifically sections 47A(1)(c) and 46(4)(i).
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
February 13, 2026
RBI imposes monetary penalty on DCB Bank Limited
The Reserve Bank of India (RBI) has, by an order dated February 06, 2026,
imposed a monetary penalty of ₹29.60 lakh (Rupees Twenty Nine Lakh Sixty
Thousand only) on DCB Bank Limited (the bank) for non-compliance with certain
directions issued by RBI on loans extended against pledge of gold ornaments and
jewellery for non-agricultural end uses. This penalty has been imposed in exercise of
powers conferred on RBI under the provisions of section 47A(1)(c) read with section
46(4)(i) of the Banking Regulation Act, 1949.
The Statutory Inspection for Supervisory Evaluation (ISE 2025) of the bank was
conducted by RBI with reference to its financial position as on March 31, 2025.
Based on the supervisory findings of non-compliance with the provisions of RBI, 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 provisions of RBI.
After considering the bank’s reply to the notice, additional submissions made by it
and oral submissions made during the personal hearing, RBI found that the following
charge against the bank was sustained, warranting imposition of monetary penalty:
The bank failed to maintain the prescribed loan-to-value (LTV) ratio in certain non-
agricultural gold loan accounts during the tenure of such loans.
The action is based on deficiencies in statutory 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.
(Brij Raj)
Press Release: 2025-2026/2115 Chief General Manager