The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1.75 lakh on Tamil Nadu-based Mukkuperi Co-operative Urban Bank for non-compliance with certain regulatory directions.
These include violations under the ‘Supervisory Action Framework (SAF)’, guidelines on ‘Loans and Advances to Directors and their Relatives’, and ‘Know Your Customer (KYC)’ norms.
The penalty was levied under provisions of the Banking Regulation Act, 1949, following an inspection conducted with reference to the bank’s financial position as of March 31, 2023. RBI found the bank had increased exposure to high-NPA sectors, sanctioned loans to directors, and failed to upload customer KYC records to the Central KYC Records Registry (CKYCR) within the prescribed timeline.
A show-cause notice was issued to the bank, and after reviewing its reply and hearing submissions, RBI confirmed the violations. The penalty highlights deficiencies in regulatory compliance and does not affect the validity of transactions with customers.
RBI clarified that further actions could be initiated against the bank if necessary.
