The Reserve Bank of India (RBI) has, by an order dated September 25, 2025, imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on Kamaraj Co-operative Town Bank Ltd., Tamil Nadu (the bank) for non-compliance with specific directions issued by RBI under ‘Supervisory Action Framework (SAF)’. This penalty has been 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 on March 31, 2024. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure 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 imposition of monetary penalty:

In non-adherence to directions issued under SAF, the bank had:

1. not reduced single borrower exposure limit, for fresh loans and advances, by 50% of the applicable regulatory limit;
2. sanctioned and disbursed fresh loans and advances not backed by collateral security of term deposits / NSCs / KVPs / insurance policies;
3. expanded the size of balance sheet; and
4. expanded the size of deposits.  

(Puneet Pancholy)     
Chief General Manager

Press Release: 2025-2026/1190