**Executive Summary**
This press release, dated October 03, 2025, announces that the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹5.50 lakh on The Bagalkot District Central Co-operative Bank Limited, Bagalkot, Karnataka. The penalty was imposed due to contravention of provisions of the Banking Regulation Act and non-compliance with NABARD directions. This follows a statutory inspection of the bank’s financial position as of March 31, 2024.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI has imposed a monetary penalty of ₹5.50 lakh on The Bagalkot District Central Co-operative Bank Limited.
* **Reasons for Penalty:**
* Contravention of provisions of Sections 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
* Non-compliance with certain directions issued by NABARD on 'Offsite Surveillance System - Revision of Due dates for submission of OSS/FMS Returns'.
* **RBI Authority:**
* The penalty was imposed under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
* **Background:**
* A statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2024.
* A notice was issued to the bank advising it to show cause as to why the penalty should not be imposed.
* **Sustained Charges:**
* The bank sanctioned director-related loans.
* The bank failed to submit certain statutory returns to NABARD within the prescribed timeline.
**Impact Analysis**
**The Bagalkot District Central Co-operative Bank Limited**
* **Impact:** Suffers a monetary penalty of ₹5.50 lakh and possible reputational damage.
* **Action Required:** The bank has already submitted their response to the notice and oral submissions to RBI. Now they must pay the penalty and take corrective action to prevent future violations.
**RBI**
* **Impact:** Reinforces its role as a regulator and demonstrates its commitment to enforcing compliance.
* **Action Required:** None explicitly stated, but implied is the continued monitoring of the bank's compliance and the potential for further action if necessary.
**NABARD**
* **Impact:** The statutory inspection they conducted led to the discovery of issues with the bank's compliance.
* **Action Required:** The press release doesn't specify any direct action for NABARD.
Key Entities Referenced
Reserve Bank of India (RBI): Imposed the monetary penalty and exercised powers under specified sections.
The Bagalkot District Central Co-operative Bank Limited, Bagalkot, Karnataka: The entity on which the monetary penalty was imposed.
Banking Regulation Act, 1949 (BR Act): The Act under which violations were observed and penalties imposed.
National Bank for Agriculture and Rural Development (NABARD): Conducted the statutory inspection of the bank.
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
October 03, 2025
RBI imposes monetary penalty on The Bagalkot District Central Co-operative
Bank Limited, Bagalkot, Karnataka
The Reserve Bank of India (RBI) has, by an order dated September 29, 2025,
imposed a monetary penalty of ₹5.50 lakh (Rupees Five Lakh Fifty Thousand only)
on The Bagalkot District Central Co-operative Bank Limited, Bagalkot, Karnataka (the
bank) for contravention of provisions of Sections 20 read with Section 56 of the
Banking Regulation Act, 1949 (BR Act) and non-compliance with certain directions
issued by National Bank for Agriculture and Rural Development (NABARD) on
‘Offsite Surveillance System – Revision of Due dates for submission of OSS/FMS
Returns’. 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
BR Act.
The statutory inspection of the bank was conducted by NABARD with reference to
its financial position as on March 31, 2024. Based on supervisory findings of
contravention of statutory provisions / non-compliance with NABARD 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 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 director related loan; and
ii) failed to submit the certain statutory returns to NABARD within the prescribed
timeline.
This action is based on deficiencies in statutory 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: 2025-2026/1241 Chief General Manager