RBI imposes monetary penalty on The Surat People’s Co-operative Bank Limited, Surat

Case Brief

RBI imposed a monetary penalty of Rs 61.60 lakh on The Surat People’s Co-operative Bank Limited, Surat, by order dated September 23, 2024. The action followed a statutory inspection and a show-cause process in which RBI sustained charges of non-compliance with directions on income recognition, asset classification, provisioning and other related matters; loans and advances to directors and related interests; maintenance of deposit accounts; and customer service. RBI noted, among other things, that the bank had not classified some borrower accounts as NPAs, had sanctioned/renewed certain director-related loans, had levied penal charges on inoperative savings/current accounts for non-maintenance of minimum balances, and had charged SMS alert fees even where customers’ mobile numbers were not on record. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.