**Summary:**
On August 7, 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹2.50 lakh (Rupees Two Lakh Fifty Thousand only) on The Nalgonda District Cooperative Central Bank Ltd., Telangana, for contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act). 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.
The statutory inspection of the bank, conducted by the National Bank for Agriculture and Rural Development (NABARD) concerning its financial position as of March 31, 2024, revealed that the bank had sanctioned loans to its directors, violating statutory provisions. After considering the bank's response to a show-cause notice and oral submissions during a personal hearing, the RBI sustained the charge against the bank, warranting the monetary penalty.
This action is based on deficiencies in statutory compliance and does not reflect the validity of any transaction or agreement by the bank with its customers. The imposition of this monetary penalty is without prejudice to any other action that the RBI may initiate against the bank.
For further information, contact:
Puneet Pancholy
Chief General Manager
Department of Communication, Central Office
Reserve Bank of India
Shahid Bhagat Singh Marg, Fort, Mumbai 400 001
Phone: 022 2266 0502
email : helpdocrbi.org.in
Website : www.rbi.org.in
Key Entities Referenced
Reserve Bank of India: The central bank of India, also referred to as RBI.
The Nalgonda District Cooperative Central Bank Ltd., Telangana: A cooperative bank in Telangana, India, penalized by RBI.
Telangana: A state in India where The Nalgonda District Cooperative Central Bank Ltd. is located.
Banking Regulation Act, 1949: Indian legislation governing the regulation of banking companies.
National Bank for Agriculture and Rural Development: An apex development finance institution in India, also referred to as NABARD.
Section 20 read with Section 56 of the Banking Regulation Act, 1949: The specific sections of the Banking Regulation Act, 1949, that were contravened.
Section 47A1c read with Sections 464i and 56 of the BR Act: The specific sections of the Banking Regulation Act under which the powers were conferred to RBI.
Puneet Pancholy: Chief General Manager at Reserve Bank of India.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व ब ैंक
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 11, 2025
RBI imposes monetary penalty on The Nalgonda District Co-operative
Central Bank Ltd., Telangana
The Reserve Bank of India (RBI) has, by an order August 07, 2025, imposed a
monetary penalty of ₹2.50 lakh (Rupees Two Lakh Fifty Thousand only) on The
Nalgonda District Co-operative Central Bank Ltd., Telangana (the bank) for
contravention of provisions of Section 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
charge against the bank was sustained, warranting imposition of monetary penalty:
The bank had sanctioned loans to its directors.
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: 2025-2026/885 Chief General Manager