Reserve Bank of India on Thursday took regulatory action against three cooperative banks, imposing monetary penalties on two lenders and placing restrictions on another for supervisory and compliance deficiencies.
The RBI imposed a penalty of Rs 30,000 on The Pallikonda Co-operative Urban Bank Limited, Tamil Nadu, for violating prudential norms related to capital adequacy and exposure limits applicable to Urban Cooperative Banks. The action followed the bank’s statutory inspection based on its financial position as on March 31, 2025.
The RBI found that the bank had allowed refund of share capital despite its Capital to Risk Weighted Assets Ratio (CRAR) being below the regulatory minimum, sanctioned loans without adhering to share-linking norms, and extended loans to nominal members beyond the prescribed limits.
In a separate action, the RBI imposed a penalty of Rs 50,000 on Walchandnagar Sahakari Bank Ltd., Maharashtra, for non-compliance with Know Your Customer (KYC) norms. The bank failed to implement a system for periodic review of risk categorisation of accounts at least once every six months.
Meanwhile, the RBI also issued strict operational directions to Kanaka Pattana Sahakara Bank Niyamita, Davangere, restricting it from granting loans, accepting fresh deposits, or allowing withdrawals without prior RBI approval due to concerns over its financial position. The restrictions will remain in force for six months and are subject to review.
