RBI imposes monetary penalty on The Ottapalam Co-operative Urban Bank Ltd., No. F. 1647, Ottapalam, Palakkad District, Kerala
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on The Ottapalam Co-operative Urban Bank Ltd., Ottapalam, Kerala. The penalty was levied for violation / non-compliance with RBI directions relating to income recognition, asset classification, provisioning and other related matters for urban co-operative banks, as well as KYC guidelines for primary (urban) co-operative banks, based on inspection findings as of March 31, 2020.
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS) after an inspection found violations / non-compliance with directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and KYC Guidelines for Primary (Urban) Co-operative Banks. The bank’s reply and oral submissions were considered, and the charges were held substantiated.
Severity Assessment
The action is a monetary penalty of ₹5 lakh, which falls in the lowest monetary band (severity 1).
The bank must absorb the penalty and remain compliant with RBI prudential and KYC directions going forward. The release does not state any operational restriction on customers, but it signals heightened regulatory scrutiny of the bank’s compliance practices.
Published as The Ottapalam Co-operative Urban Bank Ltd., No. F. 1647, Ottapalam, Palakkad District, Kerala
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