RBI Imposes Penalties On Himachal Pradesh Gramin Bank And Youth Development Co-Operative Bank

The Reserve Bank of India (RBI) has imposed monetary penalties on Himachal Pradesh Gramin Bank and Youth Development Co-operative Bank Ltd for non-compliance with regulatory guidelines related to deposits and Know Your Customer (KYC) norms.

₹5 Lakh Penalty On Himachal Pradesh Gramin Bank

RBI imposed a penalty of ₹5 lakh on Himachal Pradesh Gramin Bank, Mandi, through an order dated May 4, 2026. The action was taken for contravention of provisions under the Banking Regulation Act, 1949, and non-compliance with RBI directions related to interest rates on deposits.

The penalty followed a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) based on the bank’s financial position as of March 31, 2025.

According to RBI, the bank failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund (DEAF) within the prescribed timeline. Additionally, the bank did not pay interest on certain term deposits from the date of maturity until repayment.

RBI clarified that the penalty relates solely to deficiencies in regulatory compliance and does not affect the validity of customer transactions or agreements.

₹40,000 Penalty On Youth Development Co-Operative Bank

In a separate action dated May 6, 2026, RBI imposed a monetary penalty of ₹40,000 on Youth Development Co-operative Bank Ltd., Kolhapur, Maharashtra.

The penalty was levied for non-compliance with RBI’s revised instructions on inoperative accounts, unclaimed deposits, and KYC regulations. The inspection was conducted with reference to the bank’s financial position as of March 31, 2025.

RBI found that the bank had activated certain inoperative accounts without obtaining the required KYC documents from customers, which violated regulatory norms.

The central bank reiterated that the action is based on compliance deficiencies and does not invalidate any customer transactions or agreements.

Also Read: Kotak Mahindra Bank Gets RBI Nod to Acquire Upto 9.99% Stake in South Indian Bank!

Conclusion

The latest penalties highlight RBI’s continued focus on strengthening regulatory compliance and customer protection across the banking sector. The actions also underline the importance of strict adherence to KYC norms, deposit management guidelines, and timely handling of unclaimed funds by financial institutions.

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