RBI imposes Monetary Penalty on The Kolhapur Urban Co-operative Bank Ltd., Kolhapur (Maharashtra)

Case Brief

RBI imposed a monetary penalty of ₹1 lakh on The Kolhapur Urban Co-operative Bank Ltd., Kolhapur, Maharashtra, by order dated August 17, 2023. The penalty was imposed because the bank did not comply with RBI directions on maintenance of deposit accounts for primary (urban) co-operative banks: it charged a fixed penal amount for shortfall in minimum balance in savings accounts instead of a proportionate charge, and it did not notify customers that penal charges would be applied if the minimum balance was not restored within a month from the notice date. RBI said the action was based on deficiencies in regulatory compliance and did not pronounce on customer transactions or agreements.