The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 8 lakh on Latur District Central Co-operative Bank Ltd., Maharashtra, for violating regulatory norms, including provisions under the Banking Regulation Act and non-compliance with Know Your Customer (KYC) guidelines.
The action follows a statutory inspection conducted by NABARD based on the bank’s financials as of March 31, 2024. The RBI found that the bank had sanctioned and renewed loans linked to its directors and failed to upload customer KYC records to the Central KYC Registry within the mandated timeline.
After reviewing the bank’s written and oral submissions, the RBI confirmed the violations and invoked its powers under Section 47A of the Banking Regulation Act to levy the penalty.
The central bank clarified that the penalty is strictly for compliance deficiencies and does not affect the validity of any transactions between the bank and its customers, nor does it prevent further regulatory action if required.