The Reserve Bank of India (RBI) has levied a monetary penalty of Rs 1 lakh on Vikas Souharda Co-operative Bank Ltd, Hosapete, Karnataka, for failing to comply with certain regulatory directions related to income recognition, asset classification and provisioning for urban co-operative banks.

The penalty was imposed through an order dated August 20, 2026, under provisions of the Banking Regulation Act, 1949.

The action follows an RBI statutory inspection of the bank’s financial position as of March 31, 2025. Based on the inspection findings and subsequent correspondence, the central bank found that the lender had failed to classify certain loan accounts as non-performing assets (NPAs).

RBI said the penalty relates to regulatory compliance deficiencies and should not be construed as a ruling on the validity of transactions or agreements between the bank and its customers. The action is also without prejudice to any other measures that may be taken against the bank.