RBI penalizes The Mahbubnagar District Co-operative Central Bank Ltd.

The Reserve Bank of India (RBI), through an order dated February 23, 2026, has imposed a monetary penalty of ₹1 lakh on The Mahbubnagar District Co-operative Central Bank Ltd., Telangana. 

The penalty has been levied for contravention of provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act). RBI exercised its powers under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act while imposing the penalty. 

Inspection and Supervisory Findings 

The statutory inspection of the bank was conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2025. 

Based on supervisory findings indicating contravention of statutory provisions and related correspondence, RBI issued a show-cause notice to the bank. The notice advised the bank to explain why a penalty should not be imposed for failure to comply with the relevant provisions. 

After reviewing the bank’s written reply and oral submissions made during the personal hearing, RBI concluded that the charge against the bank was sustained. 

Nature of the Violation 

According to RBI, the bank had sanctioned a director-related loan, which constituted the contravention of statutory provisions and warranted the imposition of the monetary penalty.