The Reserve Bank of India (RBI), in an order dated September 29, 2025, has imposed a monetary penalty of Rs 1 lakh on The Hassan District Co-operative Central Bank Ltd, Karnataka for violating Section 19 read with Section 56 of the Banking Regulation Act, 1949 and for non-compliance with KYC directions. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.

The statutory inspection, conducted by NABARD based on the bank’s financial position as of March 31, 2024, found lapses, and a show-cause notice was issued. After reviewing the bank’s reply and oral submissions, RBI found that the bank had:

Held shares in another co-operative society, contravening the BR Act; and

Failed to upload customer KYC records to the Central KYC Records Registry (CKYCR) within the prescribed timeline.

RBI clarified that this penalty addresses regulatory compliance deficiencies only and does not affect the validity of any transactions or agreements. The action is without prejudice to any further measures RBI may take against the bank.