RBI has imposed fine on two banks. Action has also been taken against a non-banking finance company. All are accused of violating the rules. Let us know why the central bank has taken this step and what will be the impact on the customers?
RBI Action: The big action of the Reserve Bank of India has come to the fore on 11 August 2025. Monetary penalty has been imposed on two cooperative banks and a company. There is an allegation of breaking many banking rules including KYC. Utkal Co-operative Bank Limited Bhubaneswar is accused of non-compliance with some instructions of RBI issued on “SAF”, “Subscription of Credit Information Companies by Cooperative Banks” and “KYC”.
A monetary penalty of Rs 2.53 lakh has been imposed on this bank located in Odisha. The bank made capital expenditure without prior approval of RBI. It also failed to submit the credit information of customers to the companies. Apart from this, it was also not able to upload the KYC records of customers on the RBI Action: RBI imposed heavy monetary fine on two banks and a finance company, know the reasonRecord Registry. This bank also failed to set up a system for periodic review of risk classification of accounts, the periodicity of which should have been at least once in 6 months.
This bank of Chhattisgarh was also fined
RBI has imposed a fine of Rs 1 lakh on District Central Co-operative Bank Limited located in Bilaspur, Chhattisgarh. NABARD had conducted a statutory inspection on 31 March 2024 in relation to the financial position of the bank. During this, deficiencies in compliance with the guidelines were revealed, after which RBI issued a show cause notice. The decision to impose penalty was taken on the basis of the presentations given during the investigation, the bank’s reply presentation and documents. Actually, the bank was unable to transfer the eligible unclaimed amount to the Depositors Education and Awareness Fund within the stipulated time.
RBI’s action on this company
RBI has imposed a fine of Rs 10,000 on Altam Credo Finance Private Limited, Pune Maharashtra. National Housing Bank had conducted inspection in March 2023 and March 2024 to check the financial status of the company. A show cause notice was issued to the company for deficiencies in compliance with the instructions. Penalty was imposed after the allegations were confirmed. The company failed to establish a system of periodic review of risk classification of accounts, the periodicity of which should have been at least once in 6 months.
Will customers be affected?
RBI has clarified that the action taken against banks and companies is based on deficiencies in compliance with the guidelines. This will not affect the transactions or agreements between customers and banks.
