**Executive Summary**
RBI imposed a monetary penalty of ₹1.50 lakh on The Pattukottai Co-operative Urban Bank Limited, Tamil Nadu, for contravention of Section 17 of the Banking Regulation Act and non-compliance with RBI directions on Exposure Norms and Know Your Customer (KYC). The penalty was ordered on December 5, 2025, following a statutory inspection based on the bank's financial position as of 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 is for contravention of Section 17 of the Banking Regulation Act, 1949 (BR Act) and non-compliance with RBI directions.
* **Grounds for Penalty:**
* Failure to transfer 20% of its net profit for financial year 2023-24 to the Statutory Reserve.
* Sanctioning loans in excess of the prescribed regulatory limit to certain nominal members.
* Failure to upload the KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
* **RBI's Stance:**
* The action is based on deficiencies in regulatory compliance.
* The penalty does not prejudice any other action RBI may initiate against the bank.
**Impact Analysis**
**The Pattukottai Co-operative Urban Bank Limited**
* **Impact:** Monetary penalty of ₹1.50 lakh; potential reputational damage; increased scrutiny from RBI.
* **Action Required:** Pay the penalty; rectify the identified deficiencies in regulatory compliance; strengthen internal controls and compliance procedures.
**Bank's Customers**
* **Impact:** No direct impact on the validity of any transaction or agreement entered into by the bank with its customers.
* **Action Required:** No action required.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty and conducted the statutory inspection.
The Pattukottai Co-operative Urban Bank Limited, Tamil Nadu: The bank on which the monetary penalty was imposed.
Banking Regulation Act, 1949 (BR Act): The act under which the penalty was imposed; Sections 17, 46, 56 are mentioned.
Know Your Customer (KYC): RBI directions that the bank failed to comply with.
Central KYC Records Registry (CKYCR): The registry to which the bank failed to upload KYC records.
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RESERVE BANK OF INDIA
वेबसाइट
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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