**Summary:**
On August 19, 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹50,000 on The Ponani Cooperative Urban Bank Limited, Kerala, for non-compliance with RBI's directions regarding interest rates on deposits for Cooperative Banks. The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following a statutory inspection of the bank's financial position as of March 31, 2024. The RBI found that the bank had opened savings deposit accounts in the name of ineligible entities. While a show-cause notice was issued and considered, the RBI determined that the charge was sustained, warranting the penalty. This action is based on deficiencies in regulatory compliance and does not invalidate any transactions or agreements made by the bank with its customers. The imposition of this penalty does not preclude any further action by the RBI against the bank. For further information, contact Puneet Pancholy, Chief General Manager, at the Department of Communication, Reserve Bank of India, Central Office, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001, or via email at helpdocrbi.org.in, or phone at 022-2266 0502. The press release number is 2025-2026/989 and the website to find the release is www.rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for monetary policy and regulation of the banking sector.
The Ponani Cooperative Urban Bank Limited, Kerala: A cooperative bank in Kerala that was penalized by the Reserve Bank of India.
Kerala: The state in India where The Ponani Cooperative Urban Bank Limited is located.
Banking Regulation Act, 1949: An act of the Indian Parliament that regulates the banking industry in India.
Section 47A1c: A section of the Banking Regulation Act, 1949, related to penalties.
Sections 464i and 56: Sections of the Banking Regulation Act, 1949, related to penalties.
Cooperative Banks Interest Rate on Deposits: RBI directions regarding interest rates on deposits for cooperative banks.
March 31, 2024: The date to which the statutory inspection of the bank refers.
प्रेस प्रकाशनी PRESS RELEASE
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
August 28, 2025
RBI imposes monetary penalty on The Ponani Co-operative Urban Bank
Limited, Kerala
The Reserve Bank of India (RBI) has, by an order dated August 19, 2025, imposed
a monetary penalty of ₹50,000/- (Rupees Fifty Thousand only) on The Ponani Co-
operative Urban Bank Limited, Kerala (the bank) for non-compliance with certain
directions issued by RBI on ‘Co-operative Banks - Interest Rate on Deposits’. 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 Banking Regulation Act,
1949.
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
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 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 charge against the bank was sustained, warranting
imposition of monetary penalty:
The bank had opened certain savings deposit accounts in the name of ineligible
entities.
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.
(Puneet Pancholy)
Press Release: 2025-2026/989 Chief General Manager