The Reserve Bank of India has imposed a monetary penalty of ₹1 lakh on Rajnandgaon Kendriya Sahakari Bank Maryadit, located in Rajnandgaon, Chhattisgarh. The RBI co-op bank penalty was ordered on July 16, 2026, for non-compliance with RBI directions on interest rates on deposits. This action follows a statutory inspection conducted by NABARD.
Key Details of the RBI Co-op Bank Penalty
The National Bank for Agriculture and Rural Development (NABARD) inspected the bank with reference to its financial position as on March 31, 2025. During the inspection, supervisory findings revealed that the bank had paid additional interest to certain ineligible depositors. This is a clear violation of RBI’s prescribed norms on deposit interest rates.
Following the findings, RBI issued a show-cause notice to the bank. The bank submitted its written reply and also made oral submissions during a personal hearing. However, RBI found the charge sustained and proceeded to impose the penalty under Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
What This Means for Customers and the Bank
Customers of the bank should note that this action targets regulatory non-compliance only. Therefore, it does not affect the validity of any existing transactions or agreements between the bank and its depositors. The RBI has made this distinction explicitly clear in its official order.
Additionally, this penalty does not rule out further regulatory action by the RBI against the bank. The central bank reserves the right to initiate separate proceedings if necessary. As a result, the bank will likely review its deposit-related practices to ensure full compliance going forward.
Co-operative banks across India should treat this as a reminder to strictly follow RBI’s deposit interest rate guidelines. Meanwhile, NABARD continues to play a key supervisory role in monitoring the financial health of such institutions. RBI’s consistent enforcement action signals its commitment to maintaining regulatory discipline in the co-operative banking sector.
Attribution: RBI Press Release 2026-2027/743
Source: RBI Press Releases
