RBI Imposes Fine on Rural Bank for Unclaimed Funds Transfer

On July 21, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹1 lakh on Jilla Sahakari Kendriya Bank Maryadit in Shajapur, Madhya Pradesh. The reason for this fine was non-compliance with provisions established under the Banking Regulation Act of 1949, specifically Section 26A read with Section 56. A statutory inspection by the National Bank for Agriculture and Rural Development (NABARD) reviewed the bank's financial position as of March 31, 2025. Supervisory findings resulted in a show-cause notice issued to the bank, asking it to justify why the penalty should not be imposed due to its failure to comply with these provisions. After considering the bank's response, additional submissions, and oral arguments during a personal hearing, RBI confirmed that the fine was valid for the bank’s failure to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed period. This decision reflects concerns over legal compliance of the institution without affecting the validity or recognition of any transactions conducted with its customers. The penalty is only a measure of punishment and does not preclude further actions that RBI may take against the bank in the future.

Source: Reserve Bank of India