**Executive Summary**
RBI 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 guidelines. The penalty was imposed following a statutory inspection by NABARD with reference to the bank's financial position as of March 31, 2024, and subsequent show cause notice. The order was issued on October 14, 2025.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI imposed a monetary penalty of ₹8 lakh on Latur District Central Co-operative Bank Ltd., Maharashtra.
* The order was dated 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 directions on 'Know Your Customers (KYC)'.
* Sanctioning and renewing certain director-related loans.
* Failure to upload KYC records of certain customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
* **Inspection and Process:**
* The statutory inspection was conducted by NABARD with reference to the bank's financial position as of March 31, 2024.
* A show cause notice was issued, and the bank's reply and submissions were considered.
* **Disclaimer:**
* The action is based on deficiencies in regulatory compliance.
* The penalty is without prejudice to any other action RBI may initiate against the bank.
**Impact Analysis**
* **Latur District Central Co-operative Bank Ltd., Maharashtra**
**Impact**
* Financial penalty of ₹8 lakh.
* Potential reputational damage.
**Action Required**
* Pay the penalty.
* Address the identified deficiencies in regulatory compliance, including 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., Maharashtra**
**Impact**
* No direct impact on the validity of transactions or agreements with the bank.
* Potentially indirect impact if the bank needs to adjust its services or lending practices to ensure future compliance.
**Action Required**
* No immediate action is required.
* Customers should stay informed about any changes or updates from the bank.
* **Reserve Bank of India (RBI)**
**Impact**
* Reinforces regulatory compliance and enforcement of banking regulations.
* Maintains the integrity of the banking system.
**Action Required**
* Monitor the bank's compliance with corrective measures.
* Take further action if needed to ensure full compliance.
Key Entities Referenced
Reserve Bank of India (RBI): Imposed a monetary penalty for contravention of regulatory provisions.
Banking Regulation Act, 1949 (BR Act): Sections of this act were contravened.
Latur District Central Co-operative Bank Ltd., Maharashtra: The bank on which the monetary penalty was imposed.
RBI on ‘Know Your Customers (KYC)': Directions issued by RBI that the bank did not comply with.
National Bank for Agriculture and Rural Development (NABARD): Conducted the statutory inspection of the bank.
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