**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹8 lakh on Latur District Central Co-operative Bank Ltd., Maharashtra, due to contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949, and non-compliance with KYC directions. The penalty was imposed following a statutory inspection by NABARD and a subsequent show-cause notice. The order was issued on October 14, 2025.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹8 lakh on Latur District Central Co-operative Bank Ltd.
* The penalty order was issued on October 14, 2025.
* **Reasons for Penalty:**
* Contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949.
* Non-compliance with RBI's 'Know Your Customers (KYC)' directions.
* The bank sanctioned and renewed certain director-related loans.
* The bank failed to upload KYC records of certain customers onto the Central KYC Records Registry (CKYCR) within the prescribed timeline.
* **Basis of Action:**
* The action is based on deficiencies in regulatory compliance.
* The action is not intended to pronounce on the validity of transactions with customers.
* The penalty does not prejudice any further actions that RBI may initiate.
* **Inspection Details:**
* The statutory inspection was conducted by NABARD with reference to the bank’s financial position as of March 31, 2024.
* RBI issued a show-cause notice and considered the bank's response before imposing the penalty.
**Impact Analysis**
**Latur District Central Co-operative Bank Ltd.**
* **Impact:**
* Financial penalty of ₹8 lakh.
* Reputational impact due to non-compliance.
* **Action Required:**
* Pay the monetary penalty.
* Rectify deficiencies related to director-related loans and KYC record uploads.
* Ensure future compliance with the Banking Regulation Act and RBI's KYC directions.
**Customers of Latur District Central Co-operative Bank Ltd.**
* **Impact:**
* No direct impact on the validity of transactions or agreements with the bank.
* **Action Required:**
* No immediate action required; however, customers should monitor the bank's compliance to ensure continued service quality and regulatory adherence.
**Reserve Bank of India (RBI)**
* **Impact:**
* Reinforces its role as a regulator and supervisor of the banking sector.
* **Action Required:**
* Monitor the bank's corrective actions to ensure compliance.
* May initiate further actions if deemed necessary.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator imposing the monetary penalty.
Banking Regulation Act, 1949 (BR Act): Act under which penalties are imposed.
Latur District Central Co-operative Bank Ltd., Maharashtra: The bank on which monetary penalty is imposed.
National Bank for Agriculture and Rural Development (NABARD): Conducted the statutory inspection of the bank.
RBI on ‘Know Your Customers (KYC)’: The specific directions with which non-compliance occurred.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
वेबसाइट : www.rbi.org.in/hindi संचार िवभाग, केंद्रीय कायार्लय, शहीद भगत िसंह मागर्, फोटर्, मुंबई - 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
November 04, 2025
RBI imposes monetary penalty on Latur District Central Co-operative
Bank Ltd., Maharashtra
The Reserve Bank of India (RBl) has, by an order dated October 14, 2025, imposed
a monetary penalty of ₹8 lakh (Rupees Eight Lakh only) on Latur District Central Co-
operative Bank Ltd., Maharashtra (the bank), for contravention of provisions of Section
20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and non-
compliance with certain directions issued by RBI on ‘Know Your Customers (KYC)’.
This penalty has been imposed in exercise of powers conferred on RBI under the
provisions of Section 47A(1)(c) and Section 46(4)(i) read with Section 56 of the BR
Act.
The statutory inspection of the bank was conducted by National Bank for
Agriculture and Rural Development (NABARD), with reference to its financial position
as on March 31, 2024. Based on supervisory findings of contravention of statutory
provisions / 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 provisions and
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:
i. sanctioned and renewed certain director related loans; and
ii. failed to upload the KYC records of certain customers onto Central KYC Records
Registry (CKYCR) within the prescribed timeline.
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.
(Brij Raj)
Press Release: 2025-2026/1450 Chief General Manager