**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, effective October 14, 2025. This penalty is for contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949, and non-compliance with RBI directions on 'Know Your Customers (KYC)'. The penalty was imposed after a statutory inspection by NABARD with reference to the bank's financial position as of March 31, 2024.
**Key Points / Main Content**
* **Penalty Imposition:**
* 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 certain directions issued by RBI on ‘Know Your Customers (KYC)’.
* Sanctioning and renewal of director-related loans.
* Failure to upload KYC records of certain customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
* **Basis of Action:**
* The action is based on deficiencies in regulatory compliance.
* The action does not question the validity of transactions between the bank and its customers.
* The penalty is without prejudice to any other action that may be initiated by RBI against the bank.
**Impact Analysis**
**Latur District Central Co-operative Bank Ltd., Maharashtra**
* **Impact:**
* The bank must pay a monetary penalty of ₹8 lakh.
* The bank's reputation may be affected.
* **Action Required:**
* The bank must rectify the deficiencies that led to the penalty.
* The bank must ensure compliance with all relevant regulations and directions.
**Customers of Latur District Central Co-operative Bank Ltd., Maharashtra**
* **Impact:**
* The document states the penalty does not impact the validity of any transaction or agreement entered into by the bank with its customers.
* **Action Required:**
* No direct action required.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator imposing the monetary penalty.
Banking Regulation Act, 1949 (BR Act): The Act under which the penalty was imposed; specifically Sections 20, 47A(1)(c), 46(4)(i), and 56.
Latur District Central Co-operative Bank Ltd., Maharashtra: The bank on which the monetary penalty was imposed.
National Bank for Agriculture and Rural Development (NABARD): The organization that conducted the statutory inspection of the bank.
RBI on ‘Know Your Customers (KYC)’: The RBI directions that were not complied with, leading to the penalty.
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