RBI imposes monetary penalty on The Karnataka State Co-operative Apex Bank Ltd., Bengaluru

Case Brief

RBI, by order dated August 29, 2022, imposed a penalty of Rs 25 lakh on The Karnataka State Co-operative Apex Bank Ltd., Bengaluru. The action followed a NABARD statutory inspection and subsequent show-cause process, which found that the bank had not complied with RBI directions on housing finance, including limits on the housing loan amount that a State co-operative bank can grant to an individual borrower. RBI said the penalty was imposed under the Banking Regulation Act, 1949 for regulatory non-compliance and did not reflect on the validity of the bank's customer transactions.