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

The penalty follows a statutory inspection conducted by National Bank for Agriculture and Rural Development based on the bank's financial position as of March 31, 2025. RBI initiated supervisory action after identifying instances of non-compliance and subsequently issued a show-cause notice to the bank.

After examining the bank's response and considering submissions made during a personal hearing, RBI found that the bank had sanctioned loans related to its directors, contravening statutory provisions. As a result, the central bank imposed the monetary penalty under the powers granted to it under the Banking Regulation Act.

RBI clarified that the penalty pertains solely to deficiencies in statutory compliance and does not affect the validity of any transactions or agreements entered into by the bank with its customers. The action is also without prejudice to any additional regulatory measures that may be taken against the bank in the future.