The Reserve Bank of India has fined Berhampur Co-operative Urban Bank Limited Rs 2 lakh for allegedly failing to follow regulatory guidelines.
The RBI imposed the penalty in accordance with an order for violating guidelines regarding “exposure requirements and statutory/other restrictions” pertaining to urban cooperative banks.
Brij Raj, the chief general manager of the RBI, said in a statement that the penalty was applied following a statutory examination of the bank that took into account its financial status as of March 31, 2025.
The central bank had sent the bank a show-cause notice, requesting an explanation for why a monetary penalty should not be levied, based on supervisory findings that showed instances of non-compliance with RBI directives and subsequent correspondence in the subject.
“The RBI determined that the accusation against the bank was sustained after taking into account its response, which justified the imposition of a monetary penalty.
In particular, the regulator noted that the bank had violated both the interbank counterparty exposure limit and the prudential interbank (gross) exposure limit, the statement stated.
It stated that the purpose of exposure requirements is to keep funds from being overly concentrated with specific banks or counterparties and to guarantee responsible risk management in the interbank market.
However, the RBI made it clear that the action is based on regulatory compliance shortcomings and is not meant to rule on the legality of any agreements or transactions the bank has with its clients. Officials from Urban Bank were unavailable to comment on the fine.
