**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.50 lakh on Parbhani District Central Cooperative Bank Ltd., Maharashtra, for contravention of statutory provisions of the Banking Regulation Act and certain directions issued by RBI on ‘Know Your Customer (KYC)’. The order was issued on October 14, 2025, following a statutory inspection conducted 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 ₹1.50 lakh on Parbhani District Central Cooperative Bank Ltd., Maharashtra.
* The order was issued on October 14, 2025.
* **Regulatory Basis:**
* The penalty is for contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and RBI directions on ‘Know Your Customer (KYC)'.
* The penalty is imposed under Sections 47A(1)(c) and 46(4)(i) read with Section 56 of the BR Act.
* **Inspection Findings:**
* NABARD conducted a statutory inspection of the bank with reference to its financial position as on March 31, 2024.
* The inspection revealed contravention of statutory provisions and non-compliance with RBI directions.
* **Specific Charges:**
* The bank sanctioned certain director-related loans.
* The bank failed to implement a robust software to alert on transactions inconsistent with risk categorization.
* **Clarifications:**
* The action is based on regulatory compliance deficiencies and does not invalidate bank transactions with customers.
* The monetary penalty is without prejudice to any other action RBI may initiate against the bank.
**Impact Analysis**
**Parbhani District Central Cooperative Bank Ltd., Maharashtra**
* **Impact:** Financial penalty of ₹1.50 lakh; Potential reputational damage; Scrutiny of internal processes.
* **Action Required:** Pay the monetary penalty; Review and rectify identified deficiencies (director-related loans, KYC software); Implement corrective measures to ensure regulatory compliance; Implement and report suspicious transactions.
**Customers of Parbhani District Central Cooperative Bank Ltd., Maharashtra**
* **Impact:** No direct impact on the validity of transactions or agreements with the bank.
* **Action Required:** None.
**RBI**
* **Impact:** Enforcement of regulatory standards; Potential for further supervisory actions.
* **Action Required:** Monitor the bank's corrective actions and compliance.
Key Entities Referenced
Reserve Bank of India (RBI): Imposed a monetary penalty.
Parbhani District Central Cooperative Bank Ltd., Maharashtra: Entity upon which a monetary penalty was imposed.
Banking Regulation Act, 1949 (BR Act): Law contravened, leading to penalty.
RBI on ‘Know Your Customer (KYC)': Directions issued by RBI that were contravened.
National Bank for Agriculture and Rural Development (NABARD): Conducted statutory inspection of the bank.
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ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
November 04, 2025
RBI imposes monetary penalty on Parbhani District Central Cooperative Bank
Ltd., Maharashtra
The Reserve Bank of India (RBl) has, by an order dated October 14, 2025,
imposed a monetary penalty of ₹1.50 lakh (Rupees One Lakh Fifty Thousand only)
on Parbhani District Central Cooperative 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 certain directions issued by RBI on ‘Know Your
Customer (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 certain director related loans; and
ii) failed to put in place a robust software, to throw alerts when the transactions
were inconsistent with risk categorisation and updated profile of the
customers, as part of effective identification and reporting of suspicious
transactions.
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: 2025-2026/1449 Chief General Manager