The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 lakh on The District Co-operative Central Bank Ltd., Warangal, Telangana, for contravention of the provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949.

The penalty was imposed through an order dated December 26, 2025, in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act. The action followed a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD), with reference to the bank’s financial position as on March 31, 2025.

Based on supervisory findings, RBI issued a show-cause notice to the bank seeking an explanation for the violations. After considering the bank’s written reply and oral submissions made during the personal hearing, the central bank concluded that the contravention warranted the imposition of a monetary penalty.

According to RBI, the bank had sanctioned loans related to its directors, in violation of statutory provisions.

The RBI clarified that the penalty is based on deficiencies in statutory compliance and does not amount to a judgment on the validity of any transaction or agreement entered into by the bank with its customers. The action is without prejudice to any further measures that may be initiated by the central bank against the bank.