U.P. Postal Primary Co-operative Bank Ltd., Lucknow, Uttar Pradesh – Penalised

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹5,00,000 on U.P. Postal Primary Co-operative Bank Ltd., Uttar Pradesh under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank had violated instructions/guidelines relating to prudential norms on inter-bank counter party limit, concurrent audit of investment transactions, membership of credit information companies, income recognition, asset classification, provisioning and other related matters for UCBs, interference of directors in the day-to-day affairs of the bank, KYC/AML guidelines, and Section 29 of the Banking Regulation Act, 1949 (AACS). After issuing a show-cause notice, receiving a written reply, and conducting a personal hearing, RBI concluded that the violations were substantiated and warranted the penalty.