**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, due to contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949 and certain directions issued by RBI on 'Know Your Customer (KYC)'. The order was dated October 14, 2025. The action stems from an 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.
* The penalty is for contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949, and RBI's KYC directions.
* **Reasons for Penalty:**
* The penalty follows a statutory inspection by NABARD as of March 31, 2024.
* The bank failed to comply with statutory provisions and RBI directions.
* The bank had sanctioned certain director related loans.
* The bank failed to put in place a robust software to alert inconsistent transactions.
* **Regulatory Compliance:**
* This action is based on deficiencies in regulatory compliance.
* The penalty does not invalidate any transactions or agreements between the bank and its customers.
* RBI may initiate further actions against the bank.
**Impact Analysis**
**Parbhani District Central Cooperative Bank Ltd., Maharashtra**
* **Impact:**
* Financial penalty of ₹1.50 lakh.
* Reputational damage due to regulatory non-compliance.
* Potential for further regulatory action by the RBI.
* **Action Required:**
* Pay the monetary penalty.
* Remediate identified deficiencies in director-related lending and transaction monitoring software.
* Strengthen regulatory compliance framework.
**Customers of Parbhani District Central Cooperative Bank Ltd., Maharashtra**
* **Impact**
* No direct impact. The RBI stated the action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
* **Action Required**
* No action is required from the bank's customers.
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, 56, 47A(1)(c) and 46(4)(i).
Parbhani District Central Cooperative Bank Ltd., Maharashtra: The bank on which the monetary penalty was imposed.
RBI on ‘Know Your Customer (KYC)’: RBI directions that were contravened.
National Bank for Agriculture and Rural Development (NABARD): The entity that conducted the 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