**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.50 lakh on The Pattukottai Co-operative Urban Bank Limited, Tamil Nadu, as of December 5, 2025. This penalty is for contravention of Section 17 of the Banking Regulation Act, 1949, and non-compliance with RBI directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs' and 'Know Your Customer (KYC)'. The action is based on the statutory inspection of the bank conducted with reference to its financial position as on March 31, 2024.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹1.50 lakh on The Pattukottai Co-operative Urban Bank Limited.
* The penalty was imposed via an order dated December 5, 2025.
* **Reasons for Penalty:**
* Contravention of Section 17 of the Banking Regulation Act, 1949.
* Non-compliance with RBI directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and 'Know Your Customer (KYC)'.
* **Inspection Details:**
* The statutory inspection of the bank was conducted with reference to its financial position as of March 31, 2024.
* The penalty was warranted because the bank:
* Failed to transfer 20% of its net profit for financial year 2023-24 to the Statutory Reserve.
* Sanctioned loans in excess of the prescribed regulatory limit to certain nominal members.
* Failed to upload KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
* **Nature of Action:**
* The action is based on deficiencies in regulatory compliance.
* The penalty does not pronounce upon the validity of transactions between the bank and its customers.
* The penalty is without prejudice to any other action that may be initiated by RBI against the bank.
**Impact Analysis**
**The Pattukottai Co-operative Urban Bank Limited, Tamil Nadu**
* **Impact**
* The bank is subject to a monetary penalty of ₹1.50 lakh.
* The bank's regulatory compliance is under scrutiny by the RBI.
* **Action Required**
* The bank must pay the monetary penalty.
* The bank needs to improve its compliance with regulatory provisions and RBI directions.
**RBI**
* **Impact**
* RBI is responsible for ensuring regulatory compliance and imposing penalties for non-compliance.
* **Action Required**
* RBI may initiate further action against the bank if necessary.
**Customers of The Pattukottai Co-operative Urban Bank Limited**
* **Impact**
* The document states that this action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
* **Action Required**
* No immediate action is required, but customers should remain informed about the bank's compliance status.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
Banking Regulation Act, 1949 (BR Act): Law under which the penalty was imposed.
The Pattukottai Co-operative Urban Bank Limited, Tamil Nadu: The bank on which the monetary penalty was imposed.
Know Your Customer (KYC): RBI directions non-compliance of which lead to the penalty.
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भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
December 08, 2025
RBI imposes monetary penalty on The Pattukottai Co-operative Urban Bank
Limited, Tamil Nadu
The Reserve Bank of India (RBI) has, by an order dated December 5, 2025,
imposed a monetary penalty of ₹1.50 lakh (Rupees One Lakh Fifty Thousand only)
on The Pattukottai Co-operative Urban Bank Limited, Tamil Nadu (the bank) for
contravention of provisions of Section 17 of the Banking Regulation Act, 1949 (BR
Act) and non-compliance with certain directions issued by RBI on ‘Exposure Norms
and Statutory / Other Restrictions – UCBs’ and ‘Know Your Customer (KYC)’. This
penalty has been imposed in exercise of powers conferred on RBI under the
provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
The statutory inspection of the bank was conducted by RBI with reference to its
financial position as on March 31, 2024. Based on supervisory findings of
contravention of statutory provisions and non-compliance with RBI directions and
related correspondence in that regard, a notice was issued to the bank advising it to
show cause as to why penalty should not be imposed on it for its failure to comply
with the said provisions and directions. After considering the bank’s reply to the
notice and oral submissions made during the personal hearing, RBI found, inter alia,
that the following charges against the bank were sustained, warranting imposition of
monetary penalty:
The bank had:
i. failed to transfer 20% of its net profit for financial year 2023-24 to the Statutory
Reserve;
ii. sanctioned loans in excess of the prescribed regulatory limit to certain nominal
members; and
iii. failed to upload the KYC records of customers onto Central KYC Records
Registry (CKYCR) within the prescribed timeline.
This action is 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. Further, imposition of this monetary penalty is without
prejudice to any other action that may be initiated by RBI against the bank.
(Brij Raj)
Press Release: 2025-2026/1658 Chief General Manager