BHUBANESWAR: The Reserve Bank of India has imposed a monetary penalty of Rs 2 lakh on Berhampur Co-operative Urban Bank Limited for alleged non-compliance with regulatory directions.
According to an order issued by the RBI, the penalty was levied for violation of directions on ‘exposure norms and statutory/other restrictions’ related to urban cooperative banks.
In a statement, RBI chief general manager Brij Raj said, the penalty was imposed after a statutory inspection of the bank with reference to its financial position as on March 31, 2025. Based on supervisory findings, which revealed instances of non-compliance with RBI directions and subsequent correspondence in the matter, the central bank had issued a show-cause notice to the bank asking it to explain why a monetary penalty should not be imposed.
“After considering the bank’s reply, the RBI found that the charge against it was sustained, warranting imposition of monetary penalty. Specifically, the regulator observed that the bank had breached the prudential inter-bank (gross) exposure limit as well as the interbank counterparty exposure limit,” it said.
Exposure norms, it said, are prescribed to prevent excessive concentration of funds with particular banks or counterparties and to ensure prudent risk management in the inter-bank market. The RBI, however, clarified that the 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. Urban bank officials could not be contacted for comment on the penalty.