In June 2026, RBI imposed penalties totalling ₹7 lakh on three cooperative banks for regulatory non-compliance. Separately, ₹3 lakh was penalised on Sultanpur Jilla Sahkari Bank, Uttar Pradesh, for failing to comply with RBI directions on membership of Credit Information Companies. Additionally, ₹12 lakh was levied on Can Fin Homes and two NBFCs for compliance lapses. These actions reflect RBI's ongoing supervisory mandate over cooperative banks, NBFCs, and housing finance companies under its regulatory framework.

RBI's power to impose monetary penalties on regulated entities stems from the Banking Regulation Act, 1949, the Reserve Bank of India Act, 1934, and specific directions issued under them. Cooperative banks, though traditionally under dual regulation (RBI for banking functions, state registrars for administrative matters), were brought firmly under RBI's supervisory purview after the Banking Regulation (Amendment) Act, 2020. This amendment was triggered largely by the PMC Bank crisis, where regulatory gaps between state and central oversight allowed mismanagement to go unchecked for years.

The penalty on Sultanpur Jilla Sahkari Bank specifically relates to non-membership of Credit Information Companies (CICs) — a critical requirement because CICs like CIBIL, Equifax, Experian, and CRIF High Mark aggregate borrower credit data. If cooperative banks do not report to CICs, borrowers can game the system by taking multiple loans from different institutions without any cross-institution visibility. This undermines credit discipline across the entire lending ecosystem.

Importantly, RBI clarifies that penalty orders are not pronouncements on the validity of any customer transaction — they are strictly supervisory actions. This distinction matters: it prevents depositors from panicking while still signalling firm regulatory expectations. For RBI Grade B aspirants, understanding the graduated enforcement mechanism — from advisory letters to moral suasion to monetary penalties to licence cancellation — is essential, as examiners test both the legal basis and the policy rationale behind such supervisory tools.