RBI imposes monetary penalty on The Kottarakara Co-operative Urban Bank Limited, Kerala

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹5 0,000/- on The Kottarakara Co- operative Urban Bank Limited, Kerala for non-compliance with specific directions issued by RBI under Supervisory Action Framework (SAF). This penalty is in exercise of powers vested in RBI, as per section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The bank's financial position was inspected by RBI on March 31, 2023, based on which a notice was issued to show cause why penalty should not be imposed for non-compliance with SAF directions.

The bank's reply to the notice and oral submissions were considered by RBI, finding that the bank had sanctioned/renewed credit facilities to sectors with high NPA/deterts in non-adherence to SAF directions. This action is based on deficiencies in regulatory compliance and does not pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

The monetary penalty imposed is without prejudice to any other action that may be initiated by RBI against the bank.