**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2 lakh on The Belagavi District Central Co-operative Bank Limited, Karnataka, effective February 23, 2026. This penalty stems from contraventions of the Banking Regulation Act, 1949, and non-compliance with RBI directions concerning gold loans and commercial real estate exposure, identified during a statutory inspection as of March 31, 2025.
**Key Points / Main Content**
* **Imposition of Penalty:** RBI has levied a monetary penalty of ₹2 lakh on The Belagavi District Central Co-operative Bank Limited, Karnataka.
* **Basis of Penalty:** The penalty is for contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and non-compliance with RBI directions on 'Gold Loan – Bullet Repayment' and 'Exposure to Commercial Real Estate'.
* **Inspection Findings:** The penalty arises from supervisory findings during a statutory inspection of the bank's financial position as of March 31, 2025, conducted by NABARD.
* **Specific Contraventions:** The bank was found to have:
* Sanctioned director-related loans.
* Sanctioned gold loans under a bullet repayment scheme beyond the prescribed regulatory limit.
* Sanctioned loans to non-residential commercial real estate projects.
* **Legal Authority:** The penalty was imposed under the powers conferred on RBI by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
* **Nature of Action:** This action addresses deficiencies in statutory and regulatory compliance and does not validate any transactions or agreements between the bank and its customers.
**Impact Analysis**
* **The Belagavi District Central Co-operative Bank Limited, Karnataka**
* **Impact:** The bank faces a financial penalty of ₹2 lakh and potential further actions from the RBI for identified compliance issues.
* **Action Required:** The bank needs to ensure adherence to statutory provisions and RBI's directions, particularly regarding director loans, gold loan repayment schemes, and commercial real estate lending.
Key Entities Referenced
Banking Regulation Act, 1949: The primary law under which the penalty was imposed and violations occurred.
Reserve Bank of India (RBI): The regulatory authority imposing the monetary penalty.
The Belagavi District Central Co-operative Bank Limited, Karnataka: The financial institution that received the monetary penalty.
National Bank for Agriculture and Rural Development (NABARD): The entity that conducted the statutory inspection of the bank.
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भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
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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
February 26, 2026
RBI imposes monetary penalty on The Belagavi District Central Co-operative
Bank Limited, Karnataka
The Reserve Bank of India (RBI) has, by an order dated February 23, 2026,
imposed a monetary penalty of ₹2 lakh (Rupees Two Lakh only) on The Belagavi
District Central Co-operative Bank Limited, Karnataka (the bank) for contravention of
provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR
Act) and non-compliance with certain directions issued by RBI on ‘Gold Loan – Bullet
Repayment’ and ‘Exposure to Commercial Real Estate’. 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 National Bank for Agriculture
and Rural Development (NABARD) with reference to its financial position as on
March 31, 2025. 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 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 loans;
ii. sanctioned gold loans under bullet repayment scheme beyond the prescribed
regulatory limit; and
iii. sanctioned loan to non-residential commercial real estate project.
This action is based on deficiencies in statutory and 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: 2025-2026/2176 Chief General Manager