The Reserve Bank of India has imposed a ₹10 lakh monetary penalty on The Aurangabad District Central Co-operative Bank Limited, Bihar, effective 14 June 2025, according to rbi.org.in.

The central bank’s inspection of the lender’s books for the year ended 31 March 2024 revealed contraventions of the Banking Regulation Act, 1949, specifically sections 11(1) and 22(3)(a) that govern capital adequacy and exposure norms. A show-cause notice issued on 12 February 2025 gave the bank 15 days to respond; after reviewing the reply, the RBI concluded the violations warranted a financial sanction, the regulator said on rbi.org.in.

The fine lands amid intensified scrutiny of district co-operative banks, which together hold ₹6.8 trillion in deposits and serve 250 million rural customers. Comparable penalties this year include the ₹15 lakh levied on Osmanabad DCCB in April and the ₹8 lakh on Satara DCCB in May, signalling the RBI’s push to tighten governance standards before the proposed amendments to the Co-operative Societies Act reach Parliament. Analysts at CARE Ratings estimate that 42 of the 363 urban and district co-operative banks currently breach single-borrower exposure limits, making further enforcement likely.

The Aurangabad bank must remit the penalty within 30 days and submit a compliance certificate by 31 August 2025, according to rbi.org.in. Investors will watch the upcoming September board meeting, when the lender is expected to unveil a capital-raising plan and revised credit policy to bring ratios back within regulatory thresholds.

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