RBI imposes monetary penalty on Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala - ಆರ್ಬಿಐ - Reserve Bank of India
RBI imposes monetary penalty on Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala
The Reserve Bank of India (RBI) has, by an order dated March 25, 2025, imposed a monetary penalty of ₹50,000/- (Rupees Fifty thousand only) on Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala (the bank) for non-compliance with specific directions issued by RBI under ‘Supervisory Action Framework (SAF)’. 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. A scrutiny of the Statutory Auditor’s Report of the bank for the financial year 2023-24 revealed, inter alia, non-compliance with supervisory directions issued by RBI. Based on the same, 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 incurred capital expenditure, much in excess of the permitted limit, without prior approval of RBI in non-adherence to specific directions issued under SAF. 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: 2024-2025/2484 |