BDCC Bank Building in Belagavi. File. | Photo Credit: Hindu Photo Library
The Reserve Bank of India (RBI) has imposed a penalty of ₹2,000 on Belagavi District Central Cooperative (BDCC) Bank for non-compliance with loan disbursement norms. The Co-operative Bank violated rules relating to non-disbursement of loans to directors, exceeded regulatory limits on gold loans under bullet repayment scheme and sanctioned loan to non-residential commercial real estate projects, the RBI letter said.
BDCC violated the provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and failed to comply with certain directions issued by the RBI on “gold loan – repayment of indent” and “exposure to commercial real estate”. This sanction was imposed in exercise of the powers vested in the RBI under the provisions of Section 47A(1)(a). c) as amended by § 46 paragraph 4 letter i) and Section 56 of the BR Act, said the letter from the RBI. The infringement is six to seven years old.
This follows two rounds of inquiry by NABARD and RBI officials. The bank’s management was issued with a notice of the case and oral and written responses were requested.
“This action is based on deficiencies in compliance with laws and regulations and is not intended to declare the validity of any transaction or agreement entered into between the bank with its customers. The imposition of this monetary penalty is without prejudice to any further action that the RBI may take against the bank,” the letter said.
The bank admitted the breach.
Balachandra Jarkiholi, a former director of the bank, said the allegations relate to 2019, when Ramsh Katti was chairman. He said Mr. Katti, who headed the bank for nearly two decades, took unilateral decisions and violated RBI provisions. “I was on the board then, but Mr. Katti did not consult me or other directors. He is responsible for the mistakes,” said Balachandra Jarkiholi. He alleged that Mr Katti, whose panel lost in the recent elections, was involved in spreading rumors about the functioning of the new chairman Anna Saheb Jolle and other directors. During his tenure, Mr. Katti released loans to his relatives, ‘blah’. he said.
Mr. Katti, in turn, claimed that the then board members forced him to break the rules. “It is true that we gave loans to some persons who were against the rules to the directors. But that was because the members forced me to do so. I advised them to do so but they pressured me. In one case I wrote a letter to the joint registrar of cooperative societies against such an attempt. But the members prevailed on me and lobbied the state government to rewrite my letter. But now the three cannot be blamed by the RBI. very serious All the loans are in small amounts and have been given against appropriate guarantees,” Mr. Katti said.
Published – March 4, 2026 09:59 IST
