What changed
RBI issued a monetary penalty of ₹1 lakh on June 23, 2026, against the bank for non-compliance with exposure norms and KYC directions. The penalty was based on inspection findings as of March 31, 2025, and sustained charges of single borrower limit breach and delayed CKYCR uploads.
What it means for you
This penalty signals RBI's continued scrutiny of co-operative banks on credit concentration and KYC compliance. Banks must ensure single borrower exposure stays within regulatory caps and that customer KYC records are uploaded to CKYCR within prescribed timelines to avoid similar actions.
What you must do
- Review and tighten single borrower exposure monitoring systems to ensure compliance with RBI limits.
- Audit KYC record upload processes to CKYCR and fix any delays immediately.
- Reinforce staff training on exposure norms and KYC timelines for co-operative banks.
- Conduct internal compliance checks to pre-empt supervisory findings.
Who it affects
The Modern Co-operative Bank Limited, Chalisgaon, Compliance and risk management teams in co-operative banks
What specific violations led to this penalty?
The bank breached the prescribed regulatory limit for single borrower exposure and failed to upload KYC records to the Central KYC Records Registry within the required timeline.
Does this penalty affect the bank's customer transactions?
No, RBI clarified the action is based on regulatory compliance deficiencies and does not invalidate any customer transaction or agreement.