Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
4 Jul 2022
Case Brief
RBI imposed a monetary penalty of Rs 2.00 lakh on The Palani Co-operative Urban Bank Limited (No.A.331), Palani, Dindigul District, Tamil Nadu, by order dated June 27, 2022. The penalty was imposed after an inspection for the bank’s financial position as on March 31, 2020 found violations/non-compliance with RBI directions under Exposure Norms and Statutory / Other Restrictions – UCBs. After issuing a show-cause notice and considering the bank’s reply and oral submissions, RBI concluded the charge was substantiated and imposed the penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS). RBI clarified that the action is based on regulatory compliance deficiencies and is not intended to pronounce on the validity of any transaction or agreement with customers.
Why RBI Acted
An inspection of the bank based on its financial position as on March 31, 2020 found violations/non-compliance with RBI directions issued under Exposure Norms and Statutory / Other Restrictions – UCBs. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the charge of non-compliance was substantiated, warranting a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Operating Impact
The bank must absorb the monetary penalty and address the compliance lapses identified in RBI’s inspection. There is no stated operational ban or restriction in this release, but the finding signals ongoing regulatory scrutiny and the need to strengthen adherence to RBI exposure and statutory restriction norms.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 27 Jun 2022
- Effective From
- 27 Jun 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank