The Salem Urban Co-operative Bank Ltd., Tamil Nadu

RBI imposed a monetary penalty after a supervisory inspection found that the bank had breached directions on loans and advances to directors, their relatives, and connected firms/concerns; exposure norms and statutory/other restrictions applicable to urban co-operative banks; and Know Your Customer (KYC) requirements. RBI noted that the bank sanctioned director-related loans, granted unsecured advances beyond the prescribed regulatory limit, and did not upload customer KYC records to the Central KYC Records Registry (CKYCR) 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.

The bank must absorb the penalty and continue complying with RBI’s directions on related-party lending, exposure limits, and KYC record maintenance. The order does not invalidate past transactions, but it signals supervisory concerns and leaves open the possibility of further RBI action for the same or related compliance lapses.