Surat: The Reserve Bank of India (RBI) has, by an order dated December 26, 2024, imposed a monetary penalty of ₹4.00 lakh on The Prime Co-operative Bank Ltd. in Surat for non-compliance with directions issued by RBI on ‘Customer Protection – Limiting Liability of Customers of Co-operative Banks in Unauthorized Electronic Banking Transactions’ and ‘Basic Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs)’, read with ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs) – A Graded Approach.’

This penalty was imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

The statutory inspection of the bank was conducted by RBI, with reference to its financial position as of March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence, a notice was issued to the bank, advising it to show cause why a penalty should not be imposed for failing to comply with the said directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting the imposition of the monetary penalty:

The bank had failed to: (a) Provide customers with the facility to report unauthorized electronic banking transactions through SMS, emails, and a Toll-Free Number; (b) Enable an instant response option for replying to the SMS and email alerts sent by the bank during the financial year 2022-23; and (c) Implement certain cybersecurity control measures under the Cyber Security Framework prescribed by RBI.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, the imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank. DeshGujarat