RBI imposes monetary penalty on The Kerala State Co-operative Bank Ltd., Thiruvananthapuram

Case Brief

RBI imposed a monetary penalty of ₹48.00 lakh on The Kerala State Co-operative Bank Ltd., Thiruvananthapuram by order dated October 03, 2022. The penalty was imposed for non-compliance with section 19 read with section 56 of the Banking Regulation Act, 1949 and RBI directions on 'Gold Loan - Bullet Repayment'. The inspection found that the bank had not complied with RBI directions specifying the extent and conditions for co-operative banks to hold shares in another co-operative society, and had also failed to comply with directions limiting the quantum of gold loans under the bullet repayment option. RBI stated that the penalty was based on regulatory deficiencies and did not pronounce on the validity of any transaction or agreement with customers.