**Summary:**
On August 19, 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹1,00,000 (One Lakh Rupees) on The Vijayapura District Central Cooperative Bank Ltd., Karnataka, for contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. The penalty was levied under the powers vested in the RBI by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the same Act.
The action was based on the statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to the bank's financial position as of March 31, 2024. The RBI found that the bank had sanctioned a loan to one of its directors, which constituted a deficiency in statutory compliance.
The press release clarifies that 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. The imposition of the monetary penalty is without prejudice to any other action that may be initiated by the RBI against the bank.
For further information, contact the Department of Communication, Central Office, Reserve Bank of India, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001. Email: helpdoc@rbi.org.in. Phone: 022-2266 0502. The press release number is 2025-2026/988.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector.
The Vijayapura District Central Cooperative Bank Ltd., 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 20 read with Section 56 of the Banking Regulation Act, 1949: Legal provisions of the Banking Regulation Act, 1949, that were contravened by The Vijayapura District Central Cooperative Bank Ltd.
Section 47A1c read with Sections 464i and 56 of the BR Act: Legal provisions of the Banking Regulation Act, 1949, under which the RBI imposed the penalty.
Mumbai, Maharashtra: City in India, location of RBI central office.
Puneet Pancholy: Chief General Manager at Reserve Bank of India.
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 28, 2025
RBI imposes monetary penalty on The Vijayapura District Central Co-operative
Bank Ltd., Karnataka
The Reserve Bank of India (RBI) has, by an order dated August 19, 2025, imposed
a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on The Vijayapura District
Central Co-operative Bank Ltd., Karnataka (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 loan to its director.
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: 2025-2026/988 Chief General Manager