The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.10 lakh on Kolhapur District Central Co-operative Bank Ltd., Kolhapur, Maharashtra, for contravention of the provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949.

The penalty was levied through an order dated December 22, 2025, in exercise of powers conferred 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 NABARD, with reference to the bank’s financial position as on March 31, 2024.

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

According to RBI, the bank had sanctioned a loan to a company in which one of its directors stood as a guarantor, in violation of the 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 imposition of the monetary penalty is without prejudice to any further action that may be initiated by the central bank against the bank.