RBI monetary penalty 2026 was imposed on The N.E. & E.C. Railway Employees’ Multi-State Primary Co-operative Bank Ltd, Gorakhpur by the Reserve Bank of India on June 30, 2026. The penalty of ₹1.05 lakh was levied for breaches of the Banking Regulation Act, 1949 and non-compliance with RBI directions regarding membership of Credit Information Companies (CICs). These actions followed an RBI inspection based on the bank’s financial position as of March 31, 2025.
Quick Summary
- RBI imposed a ₹1.05 lakh penalty on the N.E. & E.C. Railway Employees’ Multi-State Primary Co-operative Bank.
- Penalty relates to violations under the Banking Regulation Act, 1949 and CIC membership directions.
- Inspection references the bank’s financial position as of March 31, 2025.
- Bank failed to transfer unclaimed amounts to the DEAF and submit borrower credit data to all CICs.
What RBI announced
The Reserve Bank of India issued an order dated June 30, 2026, imposing a monetary penalty of ₹1.05 lakh on The N.E. & E.C. Railway Employees’ Multi-State Primary Co-operative Bank Ltd, Gorakhpur. This penalty was levied for contravening provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949, and failing to comply with RBI’s directions on ‘Membership of Credit Information Companies (CICs) by Co-operative Banks.’
Key decision in simple terms
The RBI found that the bank did not transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund (DEAF) within the prescribed timeframe. Additionally, the bank failed to obtain membership of two CICs and did not submit credit information of its borrowers to all four CICs, as required by RBI regulations.
The penalty reflects deficiencies in the bank’s statutory and regulatory compliance.
Who is affected
The penalty directly affects The N.E. & E.C. Railway Employees’ Multi-State Primary Co-operative Bank Ltd, Gorakhpur. The bank’s customers, depositors, and borrowers may be indirectly impacted by the regulatory non-compliance found in the RBI inspection report and related correspondence.
Impact on banks, NBFCs, customers or borrowers
This penalty underscores the RBI’s enforcement of compliance among co-operative banks regarding statutory transfers and credit information reporting. Banks must ensure timely transfer of unclaimed deposits to DEAF and maintain full membership and reporting obligations with CICs. Borrowers’ credit information sharing through CICs is vital for comprehensive credit evaluation and financial transparency.
This action does not affect the validity of any transactions or agreements entered into by the bank with its customers, as clarified by the RBI.
Key dates, numbers or rules
The RBI’s statutory inspection considered the bank’s financial position as of March 31, 2025. The penalty order was issued on June 30, 2026, and announced on July 2, 2026.
The penalty amount imposed is ₹1.05 lakh (Rupees One Lakh Five Thousand only).
This penalty was imposed using powers under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, and Sections 25 and 23 of the Credit Information Companies (Regulation) Act, 2005.
What readers should watch next
Further regulatory actions by RBI against this bank may follow the monetary penalty. Other co-operative banks should review their compliance with RBI directions, especially regarding timely transfer of unclaimed deposits to DEAF and membership obligations with CICs.
Frequently Asked Questions
What specific violations led to the RBI penalty on the bank?
The bank failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed period and did not obtain membership of two Credit Information Companies, nor did it submit credit information of its borrowers to all four CICs as required.
How much monetary penalty did the RBI impose on the bank?
RBI imposed a penalty of ₹1.05 lakh (Rupees One Lakh Five Thousand only) on The N.E. & E.C. Railway Employees’ Multi-State Primary Co-operative Bank Ltd.
Does this penalty affect transactions with the bank's customers?
No, the RBI clarified that the penalty is based on regulatory compliance deficiencies and does not pronounce on the validity of any transactions or agreements between the bank and its customers.
Which regulatory provisions were cited for imposing the penalty?
The penalty was imposed under provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949, and Sections 25 and 23 of the Credit Information Companies (Regulation) Act, 2005.
When did the RBI conduct the inspection that led to the penalty?
The RBI conducted a statutory inspection referencing the bank’s financial position as of March 31, 2025.
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Source note: This article is based on the RBI press release dated July 2, 2026. Readers should refer to the official source for detailed rules, eligibility, deadlines or compliance requirements. View original source.
