RBI Penalises Kedarnath Urban Co-operative Bank for Regulatory Non-Compliance:

The Reserve Bank of India (RBI) has penalised Kedarnath Urban Co-operative Bank Ltd., Latur, Maharashtra a sum of Rs 40,000 for non-compliance of certain provisions of Know Your Customer (KYC) and Supervisory Action Framework (SAF). The penalty was imposed on August 3, 2026 under powers vested with RBI under the Banking Regulation Act, 1949.

The move comes after an RBI inspection of the bank on the basis of its financial position as on March 31, 2025. During the inspection, the RBI found the bank had violated some of the regulatory instructions. The bank was served with a notice to show cause why a penalty should not be imposed against it. RBI decided to impose penalty after perusing the bank's written reply and hearing its explanation.

RBI said the bank failed to upload KYC details of its customers in the Central KYC Records Registry (CKYCR) within the stipulated time. It also provided interest rates on some deposits higher than prescribed under Supervisory Action Framework, higher than those offered by State Bank of India.

RBI clarified that the penalty is only for non-compliance with regulatory requirements. It does not question the validity of any transactions or agreements between the bank and its customers. The central bank also said that this penalty does not prevent it from taking any further action against the bank if required.