Document title: RBI imposes monetary penalty on The Chikhli Urban Co‑operative Bank Limited, Chikhli, Maharashtra
Issuing authority: Reserve Bank of India
Reference No.: N/A
Date: 13 July 2026
Banking and Credit
The RBI, by an order dated 8 July 2026, imposed a monetary penalty of ₹13 lakh on The Chikhli Urban Co‑operative Bank Limited for contravention of Section 26A read with Section 56 of the Banking Regulation Act, 1949 and for non‑compliance with RBI directions on ‘Finance for Housing Schemes – UCBs’ and Know Your Customer (KYC). The penalty follows a statutory inspection of the bank’s position as of 31 March 2025, a show‑cause notice, the bank’s written reply, additional submissions and an oral hearing. The RBI sustained three charges: (i) failure to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed period; (ii) sanctioning loans to builders/contractors for land acquisition; and (iii) failure to implement robust software for effective identification and reporting of suspicious transactions.
Regulatory and Policy Measures
The action is exercised under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act. RBI clarified that the penalty is based solely on deficiencies in statutory and regulatory compliance and does not adjudicate the validity of any customer transaction or agreement. The imposition is without prejudice to any further regulatory action that the RBI may initiate against the bank.