RBI · Enforcement
RBI fines Shimoga District Co-operative Central Bank ₹1 lakh for director loans
Penalty for sanctioning or renewing loans to directors, breaching Banking Regulation Act provisions.
What changed
- RBI imposed ₹1 lakh penalty on the bank
- Penalty for contravening Section 20 read with Section 56 of BR Act
- Bank sanctioned or renewed director-related loans
The read
RBI has penalised The Shimoga District Co-operative Central Bank ₹1 lakh for sanctioning or renewing loans to directors, violating Section 20 read with Section 56 of the Banking Regulation Act, 1949. The penalty follows a NABARD inspection and sustained supervisory findings of non-compliance. While the amount is modest, the action signals RBI's focus on curbing self-dealing by cooperative bank directors. The fine does not invalidate the underlying transactions but points to compliance failures.
Key numbers
- Penalty: ₹1 lakh
- Contravention: Section 20 read with Section 56 of BR Act
- Inspection reference date: March 31, 2025
Primary source: rbi.org.in