**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2.10 lakh on Kolhapur District Central Co-operative Bank Ltd. The penalty, issued on December 22, 2025, is due to contravention of provisions of the Banking Regulation Act, 1949, discovered during a NABARD inspection conducted with reference to March 31, 2024.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI imposed a monetary penalty of ₹2.10 lakh on Kolhapur District Central Co-operative Bank Ltd.
* The order was dated December 22, 2025.
* **Reason for Penalty:**
* The penalty is for contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
* **Inspection Findings:**
* The statutory inspection was conducted by NABARD.
* The inspection was with reference to the bank's financial position as of March 31, 2024.
* The bank failed to comply with statutory provisions, related to a loan sanctioned to a company where one of the bank's directors stood as a guarantor.
* RBI issued a notice to the bank regarding the penalty and considered their reply.
* **Disclaimer:**
* The action is based on deficiencies in statutory compliance.
* The action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
* The monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
**Impact Analysis**
**Kolhapur District Central Co-operative Bank Ltd.**
* **Impact:** The bank faces a monetary penalty of ₹2.10 lakh and reputational damage.
* **Action Required:** The bank must pay the penalty and address the deficiencies in statutory compliance to prevent future penalties.
**RBI**
* **Impact:** RBI's regulatory oversight is reinforced through the imposition of the penalty.
* **Action Required:** RBI will ensure the bank complies with the regulations and may take further action if necessary.
Key Entities Referenced
Reserve Bank of India (RBI): Imposed a monetary penalty on Kolhapur District Central Co-operative Bank Ltd.
Banking Regulation Act, 1949 (BR Act): The legal act under which the penalty was imposed, specifically referencing Sections 20 and 56.
Kolhapur District Central Co-operative Bank Ltd.: The bank that received the monetary penalty.
NABARD: The agency that conducted the statutory inspection of the bank.
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RESERVE BANK OF INDIA
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ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
December 29, 2025
RBI imposes monetary penalty on Kolhapur District Central Co-operative Bank
Ltd., Kolhapur, Maharashtra
The Reserve Bank of India (RBI) has, by an order dated December 22, 2025,
imposed a monetary penalty of ₹2.10 lakh (Rupees Two Lakh Ten Thousand only) on
Kolhapur District Central Co-operative Bank Ltd., Kolhapur, Maharashtra (the bank) for
contravention of the provisions of Section 20 read with Section 56 of the Banking
Regulation Act, 1949 (BR Act). 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 BR Act.
The statutory inspection of the bank was conducted by NABARD with reference to
its financial position as on March 31, 2024. Based on supervisory findings of
contravention of statutory provisions 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 provisions. 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 sanctioned a loan to a company, in which one of the Directors of the
bank stood as a guarantor.
This 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: 2025-2026/1792 Chief General Manager