RBI imposes monetary penalty on The Kovilpatti Co-operative Urban Bank Limited, Tamil Nadu

Case Brief

RBI imposed a monetary penalty of ₹1 lakh on The Kovilpatti Co-operative Urban Bank Limited, Tamil Nadu, by order dated December 10, 2025. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection and a show-cause process. RBI said the bank had allowed refund of share capital to its members and sanctioned certain loans without complying with share-linking-to-borrowing norms, despite its CRAR being below the regulatory minimum. The release states the penalty is without prejudice to any other action RBI may initiate.