What changed
RBI issued a monetary penalty of ₹10,000 on Navapur Mercantile Co-operative Bank Ltd. on June 16, 2026, for contravening Section 35(2) read with Section 56 of the Banking Regulation Act, 1949. The penalty stems from the bank's failure to furnish information sought by RBI's inspecting officer during a statutory inspection as of March 31, 2025.
What it means for you
This action signals RBI's strict enforcement of statutory compliance, especially regarding inspection cooperation. For cooperative banks, it reinforces that withholding information during inspections can lead to penalties, regardless of the bank's size. Lenders must ensure full transparency and timely responses to RBI queries to avoid similar fines.
What you must do
- Review internal processes for responding to RBI inspection requests to ensure timely and complete information submission.
- Train compliance teams on the requirements of Section 35(2) of the BR Act regarding furnishing information during inspections.
- Conduct mock inspection drills to identify gaps in information availability and response protocols.
- Establish a designated point of contact for RBI inspections to streamline communication and document submission.
Who it affects
Navapur Mercantile Co-operative Bank Ltd., All cooperative banks in India, Compliance officers and senior management of cooperative banks, RBI inspection teams
What specific violation led to this penalty?
The bank failed to provide the information requested by RBI's inspecting officer during the statutory inspection conducted as of March 31, 2025, which contravened Section 35(2) read with Section 56 of the Banking Regulation Act, 1949.
Does this penalty affect the bank's customers?
No, the RBI clarified that the penalty is for statutory non-compliance and does not question the validity of any transactions or agreements with customers.
Can RBI take further action against this bank?
Yes, the RBI stated that this penalty is without prejudice to any other action that may be initiated against the bank for the same or related issues.