**Summary:**
On August 19, 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹1.50 lakh (Rupees One Lakh Fifty Thousand only) on The Bellary District Cooperative Central Bank Limited, Karnataka. The penalty was levied for contravention of provisions of Sections 19 and 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act). This action was taken under the powers conferred on the RBI by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
The statutory inspection of the bank, conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as of March 31, 2024, revealed the following violations: (i) the bank sanctioned a loan to one of its directors; and (ii) the bank held shares in another cooperative society, both in contravention of the BR Act. A show-cause notice was issued to the bank, and after considering the bank's reply and oral submissions, the RBI found the charges were sustained.
The action is based on deficiencies in statutory compliance and does not pronounce upon the validity of any transaction or agreement by the bank with its customers. The imposition of this penalty is without prejudice to any other action that the RBI may initiate against the bank.
**Contact:** Puneet Pancholy, Chief General Manager. Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001. Email: helpdoc@rbi.org.in. Phone: 022-2266 0502. Website: www.rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector.
The Bellary District Cooperative Central Bank Limited, Karnataka: A cooperative bank in Karnataka, India, which was penalized by the RBI.
Banking Regulation Act, 1949: An act of the Parliament of India to regulate banking companies in India.
National Bank for Agriculture and Rural Development: An apex development finance institution in India.
Section 19: Section of Banking Regulation Act, 1949 related to subsidiary companies.
Section 20: Section of Banking Regulation Act, 1949 related to restrictions on loans and advances.
Section 56: Section of Banking Regulation Act, 1949 related to Applicability of the Act to co-operative societies.
August 19, 2025: Date of order imposing monetary penalty on The Bellary District Cooperative Central Bank Limited, Karnataka.
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
August 25, 2025
RBI imposes monetary penalty on The Bellary District Co-operative Central
Bank Limited, Karnataka
The Reserve Bank of India (RBI) has, by an order dated August 19, 2025,
imposed a monetary penalty of ₹1.50 lakh (Rupees One Lakh Fifty Thousand only)
on The Bellary District Co-operative Central Bank Limited, Karnataka (the bank) for
contravention of provisions of Sections 19 and 20 read with Section 56 of the
Banking Regulation Act, 1949 (BR Act). 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, 2024. Based on supervisory findings of contravention of statutory
provisions 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. 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 loan to one of its directors; and
ii) held shares in other co-operative society in contravention of B R Act.
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.
(Puneet Pancholy)
Press Release: 2025-2026/973 Chief General Manager