RBI imposes monetary penalty on Kamaraj Co-operative Town Bank Ltd., Tamil Nadu

Case Brief

RBI, by order dated September 25, 2025, imposed a monetary penalty of ₹1 lakh on Kamaraj Co-operative Town Bank Ltd., Tamil Nadu. The penalty was imposed after an inspection with reference to the bank’s financial position as on March 31, 2024, which found non-compliance with RBI directions issued under the Supervisory Action Framework (SAF). RBI said the bank failed to reduce its single borrower exposure limit for fresh loans and advances by 50% of the applicable regulatory limit, sanctioned and disbursed fresh loans without collateral security backed by term deposits, NSCs, KVPs or insurance policies, and expanded the size of its balance sheet and deposits. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.