Case Brief
What Happened
By an order dated February 08, 2024, RBI imposed a monetary penalty of ₹66.00 lakh on City Union Bank Limited under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The penalty followed RBI's Statutory Inspection for Supervisory Evaluation (ISE 2022), which found non-compliance with prudential norms on income recognition, asset classification and provisioning, and with RBI's KYC directions. RBI noted significant divergence between NPAs as reported by the bank and as assessed in inspection, and also observed that the bank had not implemented a system for periodic review of customer risk categorisation. RBI clarified that the action was based on regulatory compliance deficiencies and not meant to pronounce on the validity of customer transactions or agreements.