City Union Bank has been penalized ₹10.10 lakh by the central bank following a statutory inspection of its operations. The charges include the unauthorized levy of charges on certain agricultural loans and failures in reporting required member-level data for Self Help Groups to credit bureaus. The bank received the final order on May 22, 2026, confirming the financial impact of these regulatory compliance lapses identified during the inspection of the bank’s position as of March 31, 2025.
Details of the Penalty
Following a recent supervisory evaluation, the bank has been issued a monetary penalty totaling ₹10,10,000. The penalty stems from two specific areas of non-compliance identified during the inspection process. The financial impact is categorized as ₹10 lakh for discrepancies in loan-related charges and ₹0.10 lakh for data reporting failures.
Areas of Non-Compliance
The regulatory review highlighted two key operational oversights:
- Agriculture Loan Charges: The bank was found to have levied unauthorized charges on certain priority sector agricultural loans of up to ₹25,000.
- Credit Reporting: The bank failed to report mandatory member-level data for Self Help Groups (SHG) to the relevant credit information companies.
Administrative Context
The bank received a formal speaking order regarding these findings on May 22, 2026. The inspection covered the bank’s operational status as of March 31, 2025. City Union Bank has acknowledged the findings and is working to ensure all future operations strictly adhere to the established guidelines regarding priority sector lending and credit data transparency.
Source: BSE
