Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
9 Sept 2025
Case Brief
RBI imposed a monetary penalty of ₹1.00 lakh on The Ottapalam Co-operative Urban Bank Ltd., Palakkad, Kerala, following a statutory inspection with reference to its financial position as on March 31, 2024. RBI said the bank failed to comply with specific directions under the Supervisory Action Framework (SAF) and with directions under the Master Direction - Credit Card and Debit Card - Issuance and Conduct Directions, 2022, including sanctioning fresh loans and advances with risk weights above 100% and issuing debit cards to certain cash credit accounts. The penalty was imposed 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 under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after a statutory inspection (with reference to financial position as on March 31, 2024) found sustained charges. The bank was found to have sanctioned fresh loans and advances carrying risk weights of more than 100% in non-adherence to directions issued under the Supervisory Action Framework (SAF), and to have issued debit cards to certain cash credit accounts, contrary to the Master Direction - Credit Card and Debit Card - Issuance and Conduct Directions, 2022.
Operating Impact
The bank must absorb the ₹1 lakh penalty; the release does not indicate any ban, suspension, or operating restriction beyond the compliance lapse already noted. The action may also leave the bank exposed to further supervisory or enforcement action by RBI.
Regulatory Basis
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 3 Sept 2025
- Effective From
- 3 Sept 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank