RBI imposes monetary penalty on Urban Co-operative Bank Limited, Maunath Bhanjan

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Urban Co-operative Bank Limited, Maunath Bhanjan, by order dated March 29, 2024. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following a statutory inspection and show-cause proceedings. RBI found that the bank had not complied with prohibitory directions issued under the Supervisory Action Framework for Primary (Urban) Co-operative Banks, specifically by offering higher interest rates on term and savings deposits than those offered by State Bank of India. RBI clarified that the penalty is based on regulatory non-compliance and does not pronounce on the validity of customer transactions.