Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
12 Dec 2024
Case Brief
By an order dated December 6, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on The Pondicherry Co-operative Urban Bank Ltd., Puducherry. The action followed a statutory inspection and subsequent show-cause proceedings, which concluded that the bank had breached RBI directions under the Supervisory Action Framework by sanctioning fresh loans and advances beyond the eligible single-borrower exposure limit and without the required collateral security. RBI also found that the bank failed to upload certain customers’ KYC records to the Central KYC Records Registry within the prescribed timeline. 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 on The Pondicherry Co-operative Urban Bank Ltd., Puducherry after a statutory inspection found non-compliance with specific directions issued under the Supervisory Action Framework (SAF) and certain KYC directions. The bank was found to have sanctioned fresh loans and advances beyond the eligible single-borrower exposure limit, without collateral security backed by term deposits/NSCs/KVPs/insurance policies, and to have failed to upload KYC records of certain customers within the prescribed timeline. 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 penalty and address the compliance deficiencies identified by RBI, particularly in lending discipline and KYC record reporting. The release does not announce an operational restriction, but RBI expressly notes that further action may still be initiated if warranted.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 6 Dec 2024
- Effective From
- 6 Dec 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank