Document title: RBI imposes monetary penalty on The Citizens Urban Cooperative Bank Ltd.
Issuing authority: Reserve Bank of India (RBI)
Reference number: Press Release: 2026-2027/560
Date: 29 June 2026
Banking and Credit
The RBI conducted a statutory inspection of The Citizens Urban Cooperative Bank Ltd. with reference to its financial position as on 31 March 2025. The inspection found that the bank had sanctioned loans beyond the prescribed regulatory limit to certain nominal members, thereby violating the RBI’s exposure norms applicable to primary (urban) cooperative banks.
Regulatory and Policy Measures
The RBI issued a show‑cause notice to the bank for non‑compliance with two specific RBI directions: (i) the ‘Exposure Norms and Statutory / Other Restrictions’ and (ii) the ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks – A Graded Approach’. After considering the bank’s reply and additional submissions, the RBI sustained the charges and imposed a monetary penalty of ₹5 lakh (Rupees Five Lakh only). The penalty is imposed under the powers conferred by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The RBI also noted that the bank failed to put in place two‑factor authentication for accessing its Core Banking Solution, a breach of the cyber‑security directive. The penalty is imposed without prejudice to any further action the RBI may initiate against the bank.
In conclusion, the RBI’s enforcement action underscores its focus on strict adherence to exposure limits and cyber‑security standards for urban cooperative banks, with a monetary penalty of ₹5 lakh levied on The Citizens Urban Cooperative Bank Ltd. for identified compliance failures.