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The Reserve Bank of India (RBI) has imposed monetary penalties on The Urban Co-operative Bank Ltd., Cuttack and The Manipur State Co-operative Bank Ltd., Manipur for regulatory non-compliance.
The Urban Co-operative Bank Ltd., Cuttack was fined ₹1.50 lakh for breaches related to Know Your Customer (KYC) norms and exposure norms. The statutory inspection revealed lapses including:
Failure to review risk categorization of customers as per prescribed periodicity.
Failure to update KYC records in the prescribed timeframe.
Breach of interbank (counterparty) exposure limits.
The Manipur State Co-operative Bank Ltd., Manipur was fined ₹2.00 lakh for violations under Section 9 of the Banking Regulation Act, 1949 and Credit Information Companies (Regulation) Act, 2005. Findings included:
Failure to dispose of certain Non-Banking Assets (NBAs) within the prescribed period.
Failure to report customer credit information to four Credit Information Companies (CICs).
In both cases, RBI issued notices, considered the banks’ responses, and conducted personal hearings before concluding that the charges of non-compliance were substantiated.
RBI emphasized that these penalties are based strictly on regulatory deficiencies and do not affect the validity of any transactions or agreements with customers. The imposition is without prejudice to any other action that may be initiated by RBI against the banks.
[RBI]