RBI imposes monetary penalty on The Arakonam Co-operative Urban Bank Limited, Tamil Nadu

Case Brief

By an order dated December 15, 2025, RBI imposed a monetary penalty of ₹2.50 lakh on The Arakonam Co-operative Urban Bank Limited, Tamil Nadu. The action was taken for contravention of Section 17 read with Section 56 of the Banking Regulation Act, 1949 and for non-compliance with RBI directions on Exposure Norms and Statutory/Other Restrictions for UCBs, Management of Advances for UCBs, and Know Your Customer (KYC). RBI said the sustained findings included failure to transfer 20% of net profit to the Statutory Reserve for three financial years, lending beyond prescribed limits to nominal members, gold loans under bullet repayment beyond limits, opening accounts that were not KYC-compliant, and failure to upload KYC records to CKYCR within the prescribed timeline.