**Executive Summary**
This press release, dated October 03, 2025, announces that the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 lakh on The Hassan District Co-operative Central Bank Ltd, Karnataka. The penalty, ordered on September 29, 2025, is for contravention of the Banking Regulation Act and non-compliance with RBI's KYC directions. The penalty is based on the financial position as of March 31, 2024.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI imposed a penalty of ₹1 lakh on The Hassan District Co-operative Central Bank Ltd, Karnataka.
* The order for the penalty was dated September 29, 2025.
* **Reasons for Penalty:**
* Contravention of Section 19 read with Section 56 of the Banking Regulation Act, 1949.
* Non-compliance with RBI directions on 'Know Your Customer (KYC)'.
* The bank held shares in other co-operative society in contravention of BR Act.
* Failure to upload customer KYC records onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
* **Inspection and Findings:**
* The statutory inspection was conducted by NABARD with reference to the bank's financial position as of March 31, 2024.
* RBI found contravention of statutory provisions and non-compliance with RBI directions after reviewing the bank's response to a show-cause notice and oral submissions.
* **Legal Basis:**
* The penalty is imposed under the powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
* **Disclaimer:**
* The action is based on regulatory compliance deficiencies and does not impact the validity of transactions between the bank and its customers.
* The penalty does not preclude further actions by RBI against the bank.
**Impact Analysis**
**The Hassan District Co-operative Central Bank Ltd, Karnataka**
* **Impact:**
* Financial penalty of ₹1 lakh.
* Potential reputational damage.
* Increased scrutiny from RBI.
* **Action Required:**
* Pay the penalty.
* Address the identified deficiencies in regulatory compliance and KYC procedures.
* Ensure compliance with the Banking Regulation Act and RBI directives.
Key Entities Referenced
Reserve Bank of India (RBI): Imposed a monetary penalty for non-compliance.
The Hassan District Co-operative Central Bank Ltd, Karnataka: Bank penalized by RBI for contravention of norms.
Banking Regulation Act, 1949 (BR Act): Act under which the penalty was imposed.
RBI on ‘Know Your Customer (KYC)’: Directions issued by RBI that were not complied with.
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
:
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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
October 03, 2025
RBI imposes monetary penalty on The Hassan District Co-operative Central
Bank Ltd, Karnataka
The Reserve Bank of India (RBI) has, by an order dated September 29, 2025,
imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on The Hassan
District Co-operative Central Bank Ltd, Karnataka (the bank) for contravention of
provisions of Section 19 read with Section 56 of the Banking Regulation Act, 1949
(BR Act) and non-compliance with 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) 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/ 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 and
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) held shares in other co-operative society in contravention of BR Act; and
ii) failed to upload the KYC records of customers onto Central KYC Records
Registry (CKYCR) within the prescribed timeline.
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: 2025-2026/1239 Chief General Manager