RBI imposes monetary penalty on The Lalgudi Co-operative Urban Bank Ltd., Tamil Nadu

Case Brief

RBI imposed a monetary penalty of ₹1 lakh on The Lalgudi Co-operative Urban Bank Ltd., Tamil Nadu, following a statutory inspection as of March 31, 2025. RBI said the bank had failed to comply with certain directions on prudential norms on capital adequacy for Primary (Urban) Co-operative Banks, including allowing refund of share capital to members and sanctioning certain loans without adhering to share-linking-to-borrowings norms, even though its CRAR was below the regulatory minimum. The penalty was issued under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.