Monetary Penalty on The Shimoga District Co-operative Central Bank Ltd.
RBI press-release 2026-2027/512 · 22 Jun 2026
Official title
RBI imposes monetary penalty on The Shimoga District Co-operative Central Bank Ltd., Karnataka
RBI press-release 2026-2027/512 · 22 Jun 2026
Official title
RBI imposes monetary penalty on The Shimoga District Co-operative Central Bank Ltd., Karnataka
Summary
Check the official recordThe Reserve Bank of India imposes a monetary penalty of ₹1 lakh on The Shimoga District Co-operative Central Bank Ltd., Karnataka. The bank violated provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949. The bank sanctioned or renewed loans to its directors. The Reserve Bank of India issued this penalty after a statutory inspection by the National Bank for Agriculture and Rural Development. The bank received a show cause notice and provided a reply. The Reserve Bank of India held a personal hearing before the final decision. This action addresses deficiencies in statutory compliance. It does not affect the validity of any transaction or agreement between the bank and its customers.
What you must do
Key dates
Who is affected
Thresholds
If you do not comply
June 22, 2026
RBI imposes monetary penalty on The Shimoga District Co-operative Central Bank Ltd., Karnataka
The Reserve Bank of India (RBI) has, by an order dated June 15, 2026, imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on The Shimoga District Co- operative Central 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, 2025. 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/ renewed director related loans.
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.
(Brij Raj)
Press Release: 2026-2027/512 Chief General Manager ᮧेस ᮧकाशनी PRESS RELEASE
भारतीय ᳯरज़वर् बᱹक
RESERVE BANK OF INDIA
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