RBI imposes monetary penalty on The Chittoor Co-operative Town Bank Limited, Chittoor, Andhra Pradesh

Case Brief

By an order dated November 24, 2022, RBI imposed a monetary penalty of Rs 6.00 lakh on The Chittoor Co-operative Town Bank Limited, Chittoor, Andhra Pradesh. The penalty was imposed for non-adherence to directions issued under the Establishment of Depositor Education and Awareness Fund, Management of Advances – UCBs, Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs, and Know Your Customer (KYC)/Anti-Money Laundering (AML)/Combating of Financing of Terrorism (CFT) guidelines, invoking Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS). RBI said the bank had failed to correctly identify deposits eligible for transfer to the DEA Fund, had not transferred amounts lying in eligible inoperative savings and current accounts to the DEA Fund, had violated the prescribed limit for gold loans under the bullet repayment scheme, and had made multiple financing to pawn brokers/money lenders without proper checks, breaching UCIC-related norms.