RBI imposes monetary penalty on Vikas Souharda Co-operative Bank Limited, Hosapete, Karnataka

On August 20, 2026, the Reserve Bank of India (RBI) fined Vikas Souharda Co-operative Bank Limited in Hosapete, Karnataka, a sum of ₹1 lakh for failing to adhere to RBI directives concerning 'Income Recognition, Asset Classification, Provisioning and Other Related Matters - UCBs'. This penalty was enacted under the authority granted to the RBI under section 47A(1)(c) of the Banking Regulation Act, 1949, in conjunction with sections 46(4)(i) and 56 of the same legislation.

The RBI's inspection was carried out as part of its statutory duties, examining the bank's financial status as of March 31, 2025.

Following a supervisory review, the bank was cited for non-compliance with RBI's directives, leading to the issuance of a notice requesting an explanation regarding the penalty. After reviewing the bank's response and oral arguments presented during a personal hearing, the RBI concluded that the bank had incorrectly classified certain loan accounts as non-performing assets (NPAs), which constituted a breach of regulatory compliance.

This decision was made solely to address regulatory compliance issues and does not evaluate the legality of any transactions or agreements between the bank and its customers.

The RBI's penalty serves as a corrective measure and does not imply any judgment on the validity of the bank's operations. It also does not preclude any further actions that the RBI might take against the bank.