The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 13 lakh on The Chikhli Urban Co-operative Bank Limited, Chikhli, Maharashtra, for violating provisions of the Banking Regulation Act, 1949, and for non-compliance with RBI directions relating to housing finance and Know Your Customer (KYC) norms.

The action follows an RBI statutory inspection based on the bank's financial position as of March 31, 2025. After reviewing the bank's response and submissions, the central bank concluded that multiple regulatory lapses had occurred.

According to the RBI, the bank failed to transfer eligible unclaimed deposits to the Depositor Education and Awareness Fund within the prescribed timeline, sanctioned loans to builders and contractors for land acquisition in violation of regulatory guidelines, and did not have a robust software system for the effective identification and reporting of suspicious transactions.

The RBI clarified that the penalty relates solely to regulatory and statutory compliance deficiencies and does not affect the validity of any transactions or agreements between the bank and its customers. It also stated that the penalty is without prejudice to any further action that may be initiated against the bank.