RBI imposes monetary penalty on The Pudukkottai Co-operative Town Bank Ltd., Pudukkottai, Tamil Nadu

Case Brief

RBI, by order dated October 12, 2023, imposed a monetary penalty on The Pudukkottai Co-operative Town Bank Ltd., Pudukkottai, Tamil Nadu for non-compliance with RBI’s directions on ‘Board of Directors - UCBs’. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 (AACS). RBI’s inspection, with reference to the bank’s financial position as on March 31, 2022, revealed that the bank had extended loans to its directors. After issuing a show-cause notice and considering the bank’s reply and oral submissions, RBI concluded that the violation was substantiated and warranted the penalty.