**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 lakh on Shri Basaveshwar Sahakari Bank Niyamitha, Bagalkot, Karnataka, due to non-compliance with RBI directives. The order was issued on November 12, 2025, based on the statutory inspection conducted on March 31, 2024. The penalty is imposed under provisions of the Banking Regulation Act, 1949.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹1 lakh on Shri Basaveshwar Sahakari Bank Niyamitha.
* The penalty was for non-compliance with RBI directions.
* **Regulations Violated:**
* Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs.
* Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016.
* **Basis of Penalty:**
* The statutory inspection of the bank was conducted by RBI as on March 31, 2024.
* The decision was based on supervisory findings of non-compliance with RBI directions.
* The bank failed to classify certain loan accounts as non-performing assets.
* The bank opened certain savings deposit accounts in the name of ineligible entities.
* **Legal Basis:**
* The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
* **Clarifications:**
* The action is based on regulatory compliance deficiencies.
* It does not affect the validity of transactions between the bank and its customers.
* The penalty does not prejudice any other action that RBI may initiate against the bank.
**Impact Analysis**
**Shri Basaveshwar Sahakari Bank Niyamitha, Bagalkot, Karnataka**
* **Impact:** The bank has been penalized with a monetary fine of ₹1 lakh and must address the identified deficiencies in regulatory compliance.
* **Action Required:** The bank needs to pay the penalty and rectify the issues related to loan classification and ineligible savings accounts, and improve compliance with RBI directions to avoid further penalties.
**Customers of Shri Basaveshwar Sahakari Bank Niyamitha, Bagalkot, Karnataka**
* **Impact:** The notice states that the validity of transactions between the bank and its customers is not impacted by the penalty, thereby reassuring customers.
* **Action Required:** No action is required from the bank's customers, as the penalty is for regulatory non-compliance by the bank and does not directly affect their transactions.
**RBI**
* **Impact:** The RBI is responsible for enforcing regulatory compliance and has taken action against the bank for non-compliance.
* **Action Required:** The RBI needs to continue monitoring the bank's compliance and take further action if necessary.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator imposing the monetary penalty and conducting the inspection.
Shri Basaveshwar Sahakari Bank Niyamitha, Bagalkot, Karnataka: The bank on which monetary penalty is imposed.
Banking Regulation Act, 1949: The act under which the powers are conferred to RBI for imposing penalty.
'Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs' and 'Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016': RBI directions for non-compliance of which the monetary penalty was imposed
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 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 20, 2025
RBI imposes monetary penalty on Shri Basaveshwar Sahakari Bank Niyamitha,
Bagalkot, Karnataka
The Reserve Bank of India (RBI) has, by an order dated November 12, 2025,
imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on Shri
Basaveshwar Sahakari Bank Niyamitha, Bagalkot, Karnataka (the bank) for non-
compliance with certain directions issued by RBI on ‘Income Recognition, Asset
Classification, Provisioning and Other Related Matters – UCBs’ and ‘Reserve Bank of
India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016’. This penalty
has been imposed in exercise of powers conferred on RBI under the provisions of
Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act,
1949.
The statutory inspection of the bank was conducted by RBI with reference to its
financial position as on March 31, 2024. Based on supervisory findings of 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 directions. After considering the
bank’s reply to the notice 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) failed to classify certain loan accounts as non-performing assets in terms of
Income recognition, Asset classification and Provisioning norms; and
ii) opened certain savings deposit accounts in the name of ineligible entities.
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: 2025-2026/1537 Chief General Manager