RBI imposes monetary penalty on The Catholic Co-operative Urban Bank Limited, Telangana

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹ 3.00 lakh on The Catholic Co-operative Urban Bank Limited, Telangana, for non-compliance with RBI directions. The RBI conducted a scrutiny of the bank in October 2023 and found that the bank had not monitored operations in certain deposit accounts, issuing balance confirmation letters without having balance in those accounts. Additionally, the bank sanctioned loans to relatives of a director.

The RBI took this action based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. This penalty does not prejudice any other action that may be initiated by the RBI against the bank. The RBI's decision was made after considering the bank's reply to a notice issued advising it to show cause for non-compliance and oral submissions during personal hearing.

The monetary penalty is imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The RBI has vested powers to impose this penalty in exercise of regulatory authority.