Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
8 May 2025
Case Brief
By an order dated May 06, 2025, RBI imposed a monetary penalty on The Nicholson Co-operative Town Bank Ltd., Tamil Nadu under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. RBI said the bank had sanctioned certain loans to directors/related interests in contravention of its directions and had also failed to upload certain customers' KYC records to CKYCR within the prescribed timeline. The penalty followed a statutory inspection and show-cause process, and RBI noted that the action is based on regulatory deficiencies and does not pronounce on the validity of any transaction.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The bank was found to have sanctioned certain director-related loans and failed to upload KYC records of certain customers to the Central KYC Records Registry (CKYCR) within the prescribed timeline, based on supervisory findings from inspection as on March 31, 2024.
Operating Impact
The bank must absorb the monetary penalty and address the compliance gaps identified by RBI, especially around related-party lending controls and timely CKYCR reporting. The penalty does not by itself restrict operations, but RBI may take further action if deficiencies persist.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.50 L
- Order Date
- 6 May 2025
- Effective From
- 6 May 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank