The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 13.30 lakh on Sindhudurg District Central Co-operative Bank Ltd., Maharashtra, for violating provisions of the Banking Regulation Act, 1949.

The penalty, imposed through an order dated July 17, 2026, follows a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) based on the bank's financial position as of March 31, 2025.

According to the RBI, the bank sanctioned a loan to a director-related entity, which contravened the provisions of Section 20(1) read with Section 56 of the Banking Regulation Act. After examining the inspection findings and the bank's response to the show-cause notice, the central bank concluded that the violation warranted the imposition of a monetary penalty.

The RBI clarified that the action is based on deficiencies in statutory compliance and does not affect the validity of any transactions or agreements entered into by the bank with its customers. It also stated that the penalty is without prejudice to any further regulatory action that may be initiated against the bank.