**Executive Summary**
This press release, dated February 13, 2026, announces that the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹63.60 lakh on CSB Bank Limited on February 06, 2026. The penalty is due to non-compliance with certain RBI directions regarding the scope of activities undertaken by Business Correspondents (BCs) and Customer Service in Banks.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI imposed a penalty of ₹63.60 lakh on CSB Bank Limited.
* The penalty was issued on February 06, 2026.
* **Reason for Penalty:**
* Non-compliance with RBI directions on the scope of activities for Business Correspondents (BCs) and Customer Service in Banks.
* RBI exercised its powers under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.
* **Findings of Non-Compliance:**
* The bank entered into arrangements with BCs for activities outside their permitted scope.
* The bank levied charges on savings accounts without ensuring upfront customer awareness.
* **Background:**
* The Statutory Inspection for Supervisory Evaluation (ISE 2025) revealed non-compliance as of March 31, 2025.
* RBI issued a notice to CSB Bank advising it to show cause why a penalty should not be imposed.
* **Disclaimer:**
* The action is based on deficiencies in statutory and regulatory compliance.
* The penalty does not prejudice any other action RBI may initiate against the bank.
**Impact Analysis**
**CSB Bank Limited**
* **Impact:**
* Financial penalty of ₹63.60 lakh.
* Reputational risk due to regulatory non-compliance.
* **Action Required:**
* Pay the penalty.
* Address the identified deficiencies in compliance with RBI directions.
**Customers of CSB Bank Limited**
* **Impact:**
* Potentially affected by non-transparent fee structures.
* May be indirectly impacted by the bank's need to address compliance issues.
* **Action Required:**
* Review bank statements for any unexpected or undisclosed charges.
* Be aware of potential changes in bank policies and procedures as CSB Bank addresses compliance issues.
**Reserve Bank of India (RBI)**
* **Impact:**
* Reinforces regulatory oversight and enforcement.
* **Action Required:**
* Continue to monitor CSB Bank's compliance with regulatory standards.
* Consider further actions if non-compliance persists.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
CSB Bank Limited: The bank on which the monetary penalty was imposed.
Banking Regulation Act, 1949: The act under which RBI exercised its powers to impose the penalty (specifically sections 47A(1)(c) and 46(4)(i)).
Scope of activities to be undertaken of Business Correspondents (BCs)' and 'Customer Service in Banks: RBI directions regarding the scope of activities of Business Correspondents.
Mumbai: Location of the Department of Communication, Central Office of RBI.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
February 13, 2026
RBI imposes monetary penalty on CSB Bank Limited
The Reserve Bank of India (RBI) has, by an order dated February 06, 2026,
imposed a monetary penalty of ₹63.60 lakh (Rupees Sixty Three Lakh Sixty
Thousand only) on CSB Bank Limited (the bank) for non-compliance with certain
directions issued by RBI on ‘Scope of activities to be undertaken of Business
Correspondents (BCs)’ and ‘Customer Service in Banks’. This penalty has been
imposed in exercise of powers conferred on RBI under the provisions of section
47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.
The Statutory Inspection for Supervisory Evaluation (ISE 2025) of the bank was
conducted by RBI with reference to its financial position as on March 31, 2025.
Based on supervisory findings of non-compliance with the provisions of 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 provisions of RBI directions.
After considering the bank’s reply to the notice and additional submissions made
by it, RBI found, inter alia, that the following charges against the bank were
sustained, warranting imposition of monetary penalty:
i) The bank entered into an arrangement with BCs for undertaking activities, which
are not covered within the scope of activities that can be undertaken by BCs; and
ii) The bank levied charges in certain savings bank accounts without ensuring that
customers were made aware of such charges upfront.
This action is based on deficiencies in statutory and 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, imposition of monetary penalty is without
prejudice to any other action that may be initiated by RBI against the bank.
(Brij Raj)
Press Release: 2025-2026/2111 Chief General Manager