RBI imposes monetary penalty on The Urban Co-operative Bank Ltd., Rourkela (Odisha)
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Urban Co-operative Bank Limited, Rourkela for contravention of RBI directions on KYC and Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks. RBI said inspection findings showed failures in customer due diligence, customer identification, and cheque book issuance-related instructions, and the bank’s explanation did not change the conclusion that the violations were substantiated.
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 because the bank did not comply with RBI directions on Know Your Customer (KYC) and Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks. The inspection found deficiencies including failure to obtain necessary documents on the nature and proof of business, allowing transactions without confirming the local address of constituents, and non-adherence to instructions relating to issue of cheque books. After notice, reply, oral hearing, and additional submissions, RBI held the charges substantiated.
Severity Assessment
The action is a monetary penalty of Rs 6 lakh, which falls in the >Rs 5 lakh and <Rs 10 lakh band, with no separate structural restriction.
The bank must absorb the penalty and address compliance gaps in customer due diligence, identification, and deposit-account handling. The order does not invalidate customer transactions, but it underscores tighter regulatory scrutiny of the bank’s KYC and account-maintenance practices.
Published as The Urban Co-operative Bank Limited, Rourkela
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