RBI Penalises Pattukottai Co-operative Urban Bank for Compliance Violations

New Delhi: The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.50 lakh on The Pattukottai Co-operative Urban Bank Limited, Tamil Nadu, for violating provisions of Section 17 of the Banking Regulation Act, 1949, and for non-compliance with regulatory directions on Exposure Norms, Statutory Restrictions for Urban Co-operative Banks, and Know Your Customer (KYC) guidelines.

This action follows an inspection of the bank’s financial position as of March 31, 2024, which revealed lapses in transferring the mandatory 20% of net profit to the Statutory Reserve, sanctioning loans beyond the permissible limits to certain nominal members, and failing to upload KYC records to the Central KYC Records Registry within the prescribed timeline. After reviewing the bank’s response to the show-cause notice and hearing submissions during the personal hearing, RBI concluded that the violations were substantiated, warranting the imposition of the penalty.

 

RBI clarified that the action is based solely on compliance shortcomings and does not affect the validity of any customer-related transactions or agreements. The central bank also noted that the penalty is without prejudice to any further regulatory actions that may be initiated.