RBI Imposes Rs18.52 Lakh Penalty on 5 Cooperative Banks

Moneylife Digital Team 05 September 2025

Investor Interest

Reserve Bank of India (RBI) has imposed a penalty of Rs18.52 lakh on five cooperative banks for non-compliance with the directions issued by the banking regulator.The highest penalty of Rs5.50 lakh has been imposed on Dakshin Dinajpur District Central Cooperative (DCC) Bank Ltd from West Bengal and Rohika Central Cooperative Bank Ltd from Bihar.

Other banks penalised by the RBI include Odisha-based Urban Cooperative Bank Ltd, Bihar-based Pataliputra Central Cooperative Bank Ltd and Maharashtra-based Dahanu Road Janata Cooperative Bank Ltd.

Dakshin Dinajpur DCC Bank has been penalised for non-compliance with directions issued by RBI on know-your-customer (KYC).

RBI statutory inspection, which was carried out through the National Bank for Agriculture and Rural Development (NABARD), found that the DCC Bank had failed to establish a system for periodically reviewing the risk categorisation of accounts, which is required at least once every six months. It also failed to upload customers' KYC records to the Central KYC Records Registry (CKYCR) within the prescribed timeline.

Rohika Central Cooperative Bank has been fined for violating Section 9 of the Banking Regulation Act, 1949 and for failing to comply with certain RBI directions relating to membership of credit information companies (CICs) and KYC norms.

An RBI statutory inspection, also carried out by NABARD, revealed multiple lapses. Rohika Central Cooperative Bank failed to dispose of certain non-banking assets within the prescribed period, did not submit customer credit information to all four CICs and also failed to upload customer KYC records onto the CKYCR within the required timeline.

RBI also inspected Urban Cooperative Bank Ltd and found that it failed to upload the KYC records of customers onto CKYCR within the prescribed timeline.

As a result, RBI imposed a penalty of Rs4.50 lakh on Urban Cooperative Bank.

Pataliputra Central Cooperative Bank is penalised Rs2.02 lakh for non-compliance with RBI directions on KYC norms and membership of CICs by cooperative banks. RBI found that the lender had failed to establish a system for periodically reviewing the risk categorisation of accounts required at least once every six months and did not submit customer credit information to three of the four CICs.

Dahanu Road Janata Cooperative Bank has been fined Rs1 lakh for non-compliance with directions issued by RBI under supervisory action framework (SAF). The lender had not reduced both single and group borrower exposure limits for certain fresh loans and advances by 25% of the applicable regulatory limit in non-adherence to directions under SAF.

In all five cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced upon the validity of any transaction or agreement they entered with their customers.

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