The Reserve Bank of India (RBI) has imposed monetary penalties on three Urban Cooperative Banks (UCBs) for deficiencies in regulatory compliance identified during statutory inspections conducted with reference to their financial position as of March 31, 2025.
Tamil Nadu-based the Lalgudi Co-operative Urban Bank Ltd. has been fined Rs 1 lakh for violating RBI’s capital adequacy norms. According to the RBI, despite its Capital to Risk-Weighted Assets Ratio (CRAR) remaining below the regulatory minimum, the bank refunded share capital to members and sanctioned certain loans without adhering to share-linking norms.
In a separate action, the Modern Co-operative Bank Ltd., Chalisgaon, Maharashtra, has been penalised Rs 1 lakh for breaching the prescribed single borrower exposure limit and failing to upload customer records to the Central KYC Records Registry (CKYCR) within the stipulated timeframe.
Meanwhile, the Nabapalli Cooperative Bank Ltd., West Bengal, has been fined Rs 3 lakh for non-compliance with Know Your Customer (KYC) norms after failing to upload customer KYC records to CKYCR within the prescribed timeline.
The RBI clarified that the penalties relate solely to regulatory compliance deficiencies and do not affect the validity of transactions undertaken by the banks with their customers.