RBI imposes monetary penalty on The Palani Co-operative Urban Bank Limited (No.A.331), Palani, Dindigul District, Tamil Nadu

Case Brief

RBI imposed a monetary penalty of Rs 2.00 lakh on The Palani Co-operative Urban Bank Limited (No.A.331), Palani, Dindigul District, Tamil Nadu, by order dated June 27, 2022. The penalty was imposed after an inspection for the bank’s financial position as on March 31, 2020 found violations/non-compliance with RBI directions under Exposure Norms and Statutory / Other Restrictions – UCBs. After issuing a show-cause notice and considering the bank’s reply and oral submissions, RBI concluded the charge was substantiated and imposed the penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS). RBI clarified that the action is based on regulatory compliance deficiencies and is not intended to pronounce on the validity of any transaction or agreement with customers.