RBI · Enforcement
RBI fines Sangli District Central Co-operative Bank ₹7 lakh
Penalty for sanctioning director-related loans, contravening Banking Regulation Act.
What changed
- RBI imposed ₹7 lakh penalty on Sangli District Central Co-operative Bank
- Bank sanctioned loans to directors, violating section 20(1) read with section 56 of BR Act
The read
The RBI fined the bank ₹7 lakh. Sanctioning loans to directors breached section 20(1) of the Banking Regulation Act, a rule that restricts credit to bank insiders. A NABARD inspection flagged the violation, and the bank's reply failed to convince the regulator. The penalty shows that co-operative banks must follow the same lending controls as commercial lenders. Verdict: director loans invite fines.
Key numbers
- Penalty amount: ₹7 lakh
- Order date: July 23, 2026
Primary source: rbi.org.in