City Union Bank Limited has announced that it has been penalized Rs. 10.10 lakhs by the Reserve Bank of India. The penalty follows a statutory inspection conducted regarding the bank’s operational compliance as of March 31, 2025. The issues identified include non-compliance with loan-related charges for specific agriculture priority sector loans and failure to report certain member-level data regarding self-help groups to credit information companies.
Details of the Regulatory Penalty
Following a statutory inspection and supervisory evaluation, the Reserve Bank of India has imposed a monetary penalty on City Union Bank. The total fine amounts to Rs. 10.10 lakhs, which consists of a Rs. 10 lakh penalty related to agriculture loan charges and Rs. 0.10 lakh regarding the reporting of data for self-help group members.
Reasons for the Action
The regulatory action highlights two specific areas of non-compliance identified during the bank’s evaluation process:
- Agriculture Loan Charges: The bank was found to have levied unauthorized charges on certain priority sector agriculture loans with values up to Rs. 25,000.
- Data Reporting: The bank failed to properly report essential member-level data for self-help groups to designated credit information companies.
Impact and Resolution
The penalty, formalized through a speaking order issued on May 20, 2026, and received by the bank on May 22, 2026, has been acknowledged by the management. The bank has confirmed the impact is limited to the stated financial penalty of Rs. 10,10,000 and does not anticipate further material disruption to its ongoing operations or financial activities.
Source: BSE
