**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 due to non-compliance with certain RBI directions. The penalty stems from deficiencies found during the Statutory Inspection for Supervisory Evaluation (ISE 2025) conducted with reference to the bank's financial position as of March 31, 2025. The order was issued on February 06, 2026.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI has imposed a monetary penalty of ₹63.60 lakh on CSB Bank Limited.
* **Reason for Penalty:**
* The penalty is for non-compliance with RBI directions regarding the scope of activities to be undertaken by Business Correspondents (BCs) and Customer Service in Banks.
* Deficiencies in statutory and regulatory compliance.
* **RBI Findings:**
* The bank entered into arrangements with BCs for undertaking activities outside their permitted scope.
* The bank levied charges on savings bank accounts without ensuring customer awareness upfront.
* **RBI Authority:**
* The penalty was imposed under the provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.
* **Disclaimer:**
* The action is based on deficiencies in compliance.
* It does not pronounce on the validity of transactions or agreements with customers.
* The penalty is without prejudice to any other action RBI may initiate against the bank.
**Impact Analysis**
**CSB Bank Limited**
* **Impact:** Financial penalty of ₹63.60 lakh and potential reputational damage due to non-compliance.
* **Action Required:** CSB Bank is required to pay the penalty and address the identified deficiencies in compliance with RBI directions. They must also review and rectify arrangements with BCs and ensure customers are aware of charges in savings accounts.
**CSB Bank Customers**
* **Impact:** Potential impact on the trust and confidence in the bank.
* **Action Required:** The customers should contact CSB Bank Limited for more information on this matter.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
CSB Bank Limited: The bank on which a monetary penalty was imposed.
Banking Regulation Act, 1949: The act under which RBI's powers are conferred.
Scope of activities to be undertaken of Business Correspondents (BCs)' and 'Customer Service in Banks': RBI directions regarding activities of Business Correspondents and Customer Service, for non-compliance to which the penalty was imposed.
Statutory Inspection for Supervisory Evaluation (ISE 2025): The inspection conducted by RBI that revealed the non-compliance.
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