RBI imposes monetary penalty on The Pragathi Co-operative Bank Limited, Karnataka
The Reserve Bank of India (RBI) has, by an order dated August 20, 2026, imposed a monetary penalty of ₹2 lakh (Rupees Two Lakh only) on The Pragathi Co-operative Bank Limited, Karnataka (the bank) for contravention of provisions of section 20 read with section 56 of the Banking Regulation Act, 1949 (BR Act) and non-compliance with certain directions issued by RBI on 'Loans and advances to…
On August 20, 2026, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹2 lakh on The Pragathi Co-operative Bank Limited, Karnataka. This penalty was issued for contravening provisions of the Banking Regulation Act, 1949 and failing to comply with RBI's directions. Specifically, the bank was found to have sanctioned loans to directors and their relatives, exceeded limits on single borrower exposure, and breached prudential inter-bank exposure limits.
The inspection took place based on the bank's financial position as of March 31, 2025, and resulted in a notice being served to the bank, asking it to explain the reasons for its non-compliance. After considering the bank's response and oral arguments in a personal hearing, RBI decided to impose the penalty, aiming to correct the deficiencies in its statutory and regulatory compliance.
This action does not comment on the validity of any specific transactions, and the penalty is issued without prejudice to any other potential actions RBI might take against the bank.
Written by urgent.news from Reserve Bank of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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