The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 lakh on The Panchsheel Mercantile Co-operative Bank Ltd., Surat, Gujarat, for non-compliance with RBI’s directions on “Customer Protection – Limiting Liability of Customers of Co-operative Banks in Unauthorised Electronic Banking Transactions.”

The penalty follows a statutory inspection of the bank as of March 31, 2024, which found that the bank had not enabled customers to instantly respond to SMS alerts to report unauthorised electronic banking transactions.

RBI said the action is based on regulatory deficiencies and does not affect the validity of any customer transactions. The penalty is imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, and is without prejudice to any further action RBI may take against the bank.