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

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹30,000 on The Pallikonda Co-operative Urban Bank Limited, Tamil Nadu, for non-compliance with RBI directions relating to prudential norms on capital adequacy and exposure limits for urban co-operative banks. RBI said the bank had allowed refund of share capital even though its CRAR was below the regulatory minimum, sanctioned loans without meeting the share-linking to borrowings requirement, and extended loans to certain nominal members beyond the prescribed limit. 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 consideration of the bank’s reply and oral submissions.