RBI Imposes Rs6 Lakh Penalty 3 Cooperative Banks and PayMe India Financial Services

Moneylife Digital Team 06 June 2025

Investor Interest

Reserve Bank of India (RBI) has imposed penalties totalling Rs6 lakh on three cooperative banks and one non-banking financial company (NBFC) for failing to comply with the directions issued by the banking regulator.

Maharashtra-based Ratanchand Shah Sahakari Bank Ltd and PayMe India Financial Services Pvt Ltd, an NBFC, were each fined Rs2 lakh. Additionally, Maharashtra-based Poornawadi Nagarik Sahakari Bank Maryadit Beed and Telangana-based Adilabad District Cooperative Central Bank Ltd were fined Rs1 lakh each.

Ratanchand Shah Sahakari Bank has been penalised for non-compliance with directions issued on know-your-customer (KYC) and specific directions issued under the supervisory action framework (SAF).

RBI's statutory inspection revealed that Ratanchand Shah Sahakari Bank violated several regulatory norms, including offering deposit interest rates higher than those offered by the State Bank of India (SBI), in contravention of directions under the SAF. The lender also breached the prescribed single borrower exposure limit while sanctioning fresh loans and advances, and failed to comply with the unique customer identification code (UCIC) guidelines by issuing multiple customer identification codes to individual customers instead of a single unique code.

PayMe India Financial Services has been fined for failing to comply with certain conditions attached to its certificate of registration (CoR) issued by RBI. The company also violated specific provisions of the RBI’s master directions for NBFCs – non-systemically important non-deposit taking companies, 2016, as well as the RBI’s Scale-Based Regulation Directions, 2023.

During a meeting with PayMe India Financial Services directors and key managerial personnel (KMP), RBI observed that the NBFC accepted public deposits in violation of its CoR and failed to seek prior written approval from the central bank for a change in shareholding exceeding 26% of its paid-up equity capital.

Poornawadi Nagarik Sahakari Bank has been penalised for non-compliance with directions issued by RBI on management of advances - urban cooperative banks (UCBs) and KYC directions. The lender had sanctioned certain gold loans in excess of the prescribed ceiling of the loan-to-value (LTV) ratio and failed to upload the KYC records of certain customers onto the Central KYC Records Registry (CKYCR) within the prescribed time.

Telangana-based Adilabad District Cooperative Central Bank was penalised for contravention of provisions of Section 20 of the Banking Regulation Act, 1949 (BR Act). RBI’s statutory inspection conducted by National Bank for Agriculture and Rural Development (NABARD) revealed that the lender had sanctioned loans to its directors.

RBI says its action against these three cooperative banks and the NBFC is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by the banks with their customers.

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