RBI imposes monetary penalty on Davanagere co-operative bank
Summary
The Reserve Bank of India imposed a monetary penalty of ₹1.50 lakh on The Davanagere District Central Co-operative Bank Limited, Karnataka for violations of the Banking Regulation Act, 1949 and non-compliance with KYC directions. The penalty addresses three specific violations identified during a statutory inspection conducted by NABARD.
What changed
RBI imposed a penalty of ₹1.50 lakh on The Davanagere District Central Co-operative Bank Limited for: (1) holding shares in other co-operative societies in contravention of the Banking Regulation Act, (2) allotting multiple customer identification codes instead of a Unique Customer Identification Code (UCIC) for customers, and (3) failing to upload KYC records to the Central KYC Records Registry (CKYCR) within prescribed timelines. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 following a show cause notice and personal hearing.
Co-operative banks and other financial institutions should review their shareholding practices to ensure compliance with BR Act restrictions, implement proper UCIC assignment procedures for all customers, and verify timely submission of KYC records to CKYCR. The supervisory action demonstrates continued RBI focus on KYC compliance enforcement at the co-operative banking level.
What to do next
- Review internal controls to ensure compliance with Section 19 of the Banking Regulation Act regarding shareholding in other entities
- Verify that all customers have been assigned a single UCIC and eliminate duplicate customer identification codes
- Confirm timely upload of all KYC records to the Central KYC Records Registry (CKYCR)
Penalties
₹1.50 lakh (Rupees One lakh fifty thousand) monetary penalty
Archived snapshot
Mar 31, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Press Releases
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| Date : Mar 30, 2026 | |
| RBI imposes monetary penalty on The Davanagere District Central Co-operative Bank Limited, Karnataka | |
| | The Reserve Bank of India (RBI) has, by an order dated March 24, 2026, imposed a monetary penalty of ₹1.50 lakh (Rupees One lakh fifty thousand only) on The Davanagere District Central Co-operative Bank Limited, Karnataka (the bank) for contravention of provisions of Section 19 read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
The statutory inspection of the bank was conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2025. Based on supervisory findings of contravention of statutory provisions / non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions and directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
1. held shares in other co-operative societies in contravention of BR Act;
2. allotted multiple customer identification code to certain customers instead of a Unique Customer ldentification Code (UCIC) for each customer; and
3. failed to upload the KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
This action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
(Brij Raj)
Chief General Manager
Press Release: 2025-2026/2357 | | The Reserve Bank of India (RBI) has, by an order dated March 24, 2026, imposed a monetary penalty of ₹1.50 lakh (Rupees One lakh fifty thousand only) on The Davanagere District Central Co-operative Bank Limited, Karnataka (the bank) for contravention of provisions of Section 19 read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
The statutory inspection of the bank was conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2025. Based on supervisory findings of contravention of statutory provisions / non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions and directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
- held shares in other co-operative societies in contravention of BR Act;
- allotted multiple customer identification code to certain customers instead of a Unique Customer ldentification Code (UCIC) for each customer; and
- failed to upload the KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline. This action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
(Brij Raj)
Chief General Manager
Press Release: 2025-2026/2357 |
| The Reserve Bank of India (RBI) has, by an order dated March 24, 2026, imposed a monetary penalty of ₹1.50 lakh (Rupees One lakh fifty thousand only) on The Davanagere District Central Co-operative Bank Limited, Karnataka (the bank) for contravention of provisions of Section 19 read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
The statutory inspection of the bank was conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2025. Based on supervisory findings of contravention of statutory provisions / non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions and directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
- held shares in other co-operative societies in contravention of BR Act;
- allotted multiple customer identification code to certain customers instead of a Unique Customer ldentification Code (UCIC) for each customer; and
- failed to upload the KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline. This action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
(Brij Raj)
Chief General Manager
Press Release: 2025-2026/2357 | |
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