**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 and regulatory provisions. The penalty, issued on October 14, 2025, is based on an inspection conducted by NABARD as of March 31, 2024, and relates to non-compliance with the Banking Regulation Act and RBI directives on 'Know Your Customer (KYC)'.
**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.
* **Basis for Penalty:**
* Contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949.
* Non-compliance with certain directives issued by RBI on 'Know Your Customer (KYC)'.
* The penalty is imposed under Section 47A(1)(c) and Section 46(4)(i) read with Section 56 of the BR Act.
* **Inspection Findings:**
* The statutory inspection was conducted by NABARD with reference to the bank's financial position as of March 31, 2024.
* Deficiencies identified include:
* Sanctioned certain director-related loans.
* Failure to implement robust software for flagging inconsistent transactions.
* **Disclaimer:**
* The action is based on regulatory compliance deficiencies and does not invalidate transactions between the bank and its customers.
* The monetary penalty does not preclude further actions by RBI.
**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 scrutiny by RBI.
* **Action Required:**
* Pay the monetary penalty.
* Address the deficiencies identified in the inspection report.
* Strengthen compliance procedures to avoid future penalties.
Key Entities Referenced
Reserve Bank of India (RBI): Imposed a monetary penalty; regulatory body issuing directions
Banking Regulation Act, 1949 (BR Act): The law under which penalty was imposed, specifically Sections 20, 56, 47A(1)(c), and 46(4)(i)
Parbhani District Central Cooperative Bank Ltd., Maharashtra: The entity on which monetary penalty was imposed
RBI on ‘Know Your Customer (KYC)’: Directions issued by RBI that were contravened
National Bank for Agriculture and Rural Development (NABARD): Conducted the statutory inspection of the bank
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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