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RBI Imposes Penalty on Three Co-operative Banks for Regulatory Non-Compliance — Strengthening Banking Governance.

Banking & Finance | Dated: 18 Nov 2025

“The Reserve Bank of India (RBI)” has imposed monetary penalties on “three cooperative banks” for failing to comply with various regulatory instructions, including norms related to “Know Your Customer (KYC)” and “exposure limits.” This action is part of the central bank’s ongoing efforts to enforce “strict regulatory discipline” within the cooperative banking sector to safeguard the interests of depositors.

🎯 Key Highlights:

  • RBI penalized three co-operative banks for non-compliance with regulatory norms.
  • The violations included KYC norms and exposure limits.
  • The penalties aim to enforce discipline and protect depositor interests.

💡 Other Important Facts:

  • RBI has been tightening norms for UCBs (Urban Cooperative Banks) recently.
  • Penalties are based on deficiencies in regulatory compliance, not validity of transactions.
  • Depositors in these banks are insured by DICGC up to Rs 5 lakh.

📚 Test Your Knowledge:

Which regulatory body imposed penalties on three co-operative banks for non-compliance?

Correct Answer: RBI

🚀 Quick Recap:

About Cooperative Banks

  • Regulated by: RBI (Banking regulations) and Registrar of Cooperative Societies (Governance).
  • Purpose: To provide financial support to small businesses, agriculture, and unorganized sectors.