Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
28 Mar 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty on Kodungallur Town Co-operative Bank Ltd., Kerala after a statutory inspection and follow-up supervisory process. RBI found that the bank had not complied with directions relating to management of advances, income recognition/asset classification/provisioning, and interest rate on deposits. The sustained violations included failure to classify certain loan accounts as non-performing assets and opening savings deposit accounts for ineligible entities. The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found non-compliance with directions on 'Management of Advances – UCBs', 'Income Recognition, Asset Classification, Provisioning and Other Related Matters - UCBs' and 'Interest Rate on Deposits'. The sustained charges included failure to classify certain loan accounts as non-performing assets and opening certain savings deposit accounts in the name of ineligible entities. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the ₹1 lakh penalty, and the finding may expose it to further supervisory or enforcement action. There is no direct operating restriction in this order, but the bank is expected to strengthen compliance around loan classification and deposit-account eligibility.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 26 Mar 2025
- Effective From
- 26 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank