Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
26 Feb 2026
Case Brief
RBI, by order dated February 23, 2026, imposed a monetary penalty of Rs 50,000 on The Prakasapuram Co-operative Urban Bank Limited, Tamil Nadu. The penalty followed a statutory inspection and a show-cause process after RBI found that the bank had paid dividend from accumulated profits of previous years, contrary to RBI directions on declaration of dividend by urban co-operative banks. RBI imposed the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
Following a statutory inspection with reference to the bank's financial position as on March 31, 2025, RBI issued a show-cause notice based on supervisory findings of non-compliance with its directions and related correspondence. After considering the bank's reply and oral submissions, RBI sustained the charge that the bank had paid dividend from accumulated profits of previous years, in contravention of RBI directions on 'Declaration of dividend by UCBs'. 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; no operational restriction is described in this release. The action signals a regulatory breach, and RBI notes it may initiate any other action it deems appropriate.
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 50,000
- Order Date
- 23 Feb 2026
- Effective From
- 23 Feb 2026
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank