**Executive Summary**
This is a press release from the Reserve Bank of India (RBI), dated February 13, 2026, announcing a monetary penalty of ₹63.60 lakh imposed on CSB Bank Limited. The penalty is for non-compliance with certain RBI directions regarding the scope of activities for Business Correspondents (BCs) and customer service in banks, based on findings from the Statutory Inspection for Supervisory Evaluation (ISE 2025) with reference to the bank's financial position as of March 31, 2025.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹63.60 lakh on CSB Bank Limited.
* The penalty was issued via an order dated February 06, 2026.
* The penalty is for non-compliance with RBI directions.
* **Basis for Penalty:**
* Non-compliance relates to RBI directions on ‘Scope of activities to be undertaken of Business Correspondents (BCs)' and 'Customer Service in Banks'.
* The penalty is imposed under powers conferred by section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.
* The action follows the Statutory Inspection for Supervisory Evaluation (ISE 2025) as of March 31, 2025.
* **Specific Violations:**
* The bank entered into an arrangement with BCs for activities outside their permitted scope.
* The bank levied charges on savings accounts without ensuring customer awareness.
* **Disclaimer:**
* The action is based on deficiencies in statutory and regulatory compliance.
* The action does not pronounce on the validity of transactions between the bank and its customers.
* The penalty is without prejudice to any further action by RBI.
**Impact Analysis**
**CSB Bank Limited**
* **Impact**
* Financial penalty of ₹63.60 lakh imposed.
* Reputational risk due to non-compliance.
* Potential for further scrutiny by RBI.
* **Action Required**
* Pay the penalty.
* Review and rectify non-compliant practices related to BC activities and customer communication regarding charges.
* Ensure full compliance with RBI directions to avoid future penalties.
**Customers of CSB Bank Limited**
* **Impact**
* Those with Savings Bank accounts may have been unaware of the charges levied on their accounts.
* **Action Required**
* Customers should review their account statements to identify levied charges.
* Customers should contact CSB Bank Limited to dispute charges they were not made aware of.
**Reserve Bank of India (RBI)**
* **Impact**
* Needs to monitor CSB Bank Limited for compliance with directions.
* **Action Required**
* Take further actions as required to ensure compliance.
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 the 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): RBI directions related to the scope of permissible activities for Business Correspondents, which CSB Bank Limited violated.
Customer Service in Banks: RBI directions related to Customer Service in Banks, which CSB Bank Limited violated.
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