Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Mar 2025
Case Brief
RBI, by order dated March 26, 2025, imposed a monetary penalty of ₹1.00 lakh on The Sholinghur Co-operative Urban Bank Limited, Vellore, Tamil Nadu. The penalty followed supervisory findings from a statutory inspection as of March 31, 2023, which concluded that the bank had violated RBI directions on exposure norms/statutory restrictions for UCBs and KYC compliance. RBI said the bank sanctioned loans to nominal members beyond the prescribed regulatory limit and failed to upload KYC records to CKYCR within the required 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
Following a statutory inspection with reference to the bank's financial position as on March 31, 2023, RBI found sustained charges of non-compliance with its directions on 'Exposure Norms and Statutory / Other Restrictions - UCBs' and 'Know Your Customer (KYC)'. Specifically, the bank sanctioned loans to nominal members in excess of the prescribed regulatory limit and did not upload customers' KYC records to the Central KYC Records Registry (CKYCR) within the required timeline. RBI imposed the monetary penalty 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 monetary penalty and address the compliance gaps identified by RBI, particularly around lending limits for nominal members and timely CKYCR uploads. The order does not state an operational ban, but RBI may initiate further action if similar deficiencies persist.
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
- 26 Mar 2025
- Effective From
- 26 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank