The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 lakh on The Hyderabad District Co-operative Central Bank Ltd., Telangana, for violating provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949. The penalty was issued via an order dated June 23, 2025, under the authority granted by Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Act.

The breach came to light during a statutory inspection carried out by the National Bank for Agriculture and Rural Development (NABARD), assessing the bank’s financial status as of March 31, 2024. Following the findings, a show-cause notice was served to the bank, seeking an explanation for the non-compliance. After evaluating the bank’s response and oral submissions, the RBI concluded that the bank had sanctioned loans to one of its directors—an act prohibited under the applicable statutory provisions.