**Executive Summary**
This press release, dated September 29, 2025, announces that the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 lakh on Kamaraj Co-operative Town Bank Ltd., Tamil Nadu. The penalty was issued on September 25, 2025, due to non-compliance with specific directions under the Supervisory Action Framework (SAF). The non-compliance was found based on the bank's financial position as of March 31, 2024.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹1 lakh on Kamaraj Co-operative Town Bank Ltd., Tamil Nadu.
* The penalty is for non-compliance with RBI directions under the Supervisory Action Framework (SAF).
* The action is taken under Sections 47A(1)(c), 46(4)(i), and 56 of the Banking Regulation Act, 1949.
* **Findings of Non-Compliance:**
* The statutory inspection of the bank was conducted by RBI with reference to its financial position as of March 31, 2024.
* The bank did not reduce the single borrower exposure limit by 50% of the applicable regulatory limit.
* The bank sanctioned and disbursed fresh loans and advances not backed by collateral security of term deposits, NSCs, KVPs, and insurance policies.
* The bank expanded the size of its balance sheet and deposits.
* **Scope and Intent:**
* The action is based on deficiencies in regulatory compliance.
* It is not intended to pronounce upon the validity of any transaction or agreement between the bank and its customers.
* The monetary penalty is without prejudice to any other action that RBI may initiate against the bank.
**Impact Analysis**
**Kamaraj Co-operative Town Bank Ltd., Tamil Nadu**
**Impact**
The bank is impacted through the imposition of a monetary penalty of ₹1 lakh, and faces possible further action from the RBI.
**Action Required**
The bank must pay the penalty and address the identified non-compliance issues to avoid further regulatory action.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
Banking Regulation Act, 1949: The act under which the penalty was imposed, specifically Sections 47A(1)(c), 46(4)(i), and 56.
Supervisory Action Framework (SAF): Framework under which RBI issued directions that Kamaraj Co-operative Town Bank Ltd. did not comply with.
Kamaraj Co-operative Town Bank Ltd., Tamil Nadu: The bank on which the monetary penalty was imposed.
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
September 29, 2025
RBI imposes monetary penalty on Kamaraj Co-operative Town Bank Ltd.,
Tamil Nadu
The Reserve Bank of India (RBI) has, by an order dated September 25, 2025,
imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on Kamaraj Co-
operative Town Bank Ltd., Tamil Nadu (the bank) for non-compliance with specific
directions issued by RBI under ‘Supervisory Action Framework (SAF)’. This penalty
has been imposed in exercise of powers conferred on RBI under the provisions of
Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act,
1949.
The statutory inspection of the bank was conducted by RBI with reference to its
financial position as on March 31, 2024. Based on supervisory findings of non-
compliance with 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 directions. After considering the
bank’s reply to the notice and oral submissions made during the personal hearing,
RBI found, inter alia, that the following charges against the bank were sustained,
warranting imposition of monetary penalty:
In non-adherence to directions issued under SAF, the bank had:
i) not reduced single borrower exposure limit, for fresh loans and advances, by
50% of the applicable regulatory limit;
ii) sanctioned and disbursed fresh loans and advances not backed by collateral
security of term deposits / NSCs / KVPs / insurance policies;
iii) expanded the size of balance sheet; and
iv) expanded the size of deposits.
This action is based on deficiencies in 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 this monetary penalty is without
prejudice to any other action that may be initiated by RBI against the bank.
(Puneet Pancholy)
Press Release: 2025-2026/1190 Chief General Manager