New Delhi, May 9 The Reserve Bank of India (RBI) has imposed monetary penalties on five banks across Karnataka, Maharashtra, Tamil Naduand Jammu & Kashmir for violations of key banking regulations, including lapses in KYC compliance, delayed reportingand unauthorised deposit activities. The central bank issued official notifications confirming the fines and clarifying that customer services will remain unaffected.

This action follows the RBI’s ongoing efforts to ensure discipline and accountability in India’s banking sector, particularly among cooperative banks.

Banks Penalised and Reasons for Action

Karnataka:

• Vishwa kalyan sahakar bank niyamathi, HUBLI Fined ₹50,000

• Hareshwar Urban Co-Operative Bank Limited Fined ₹50,000
  Reason: Both failed to submit statutory returns within the prescribed time frame, violating RBI compliance norms.

Tamil Nadu:

• Nicholson Co-operative Town Bank Limited Fined ₹1.50 lakh
  Reason: Sanctioned loans to parties (directors) and failed to upload KYC data to the Central KYC Record Registry on time.

Maharashtra:

• Varana Sahakari Bank Limited, Varananagar Fined ₹2 lakh
  Reason: Failed to transfer unclaimed deposits to the Deposit Education and Awareness Fund (DEAF) within the deadline, ignoring customer interest.

Jammu & Kashmir:

• The Jammu Central Co-operative Bank Limited Fined ₹1 lakh
  Reason: Accepted new savings bank deposits in violation of RBI’s specific directives.

Customer Services Will Remain Unaffected

In its official statement, the RBI clarified that these penalties are administrative in nature and do not affect ongoing customer transactions or the stability of the respective banks. All banking operations, including deposits and loans, will continue as usual.

The fines serve as a regulatory warning aimed at reinforcing adherence to statutory obligations and ethical conduct within the banking ecosystem.

RBI Tightens Oversight on Cooperative Banks

This action comes a day after five cooperative banks in Maharashtra were also fined for separate regulatory lapses. With rising customer reliance on cooperative banks in semi-urban and rural areas, the RBI has intensified its oversight to ensure that customer safety and banking discipline are not compromised.