On October 27, 2025, the Reserve Bank of India (RBI) released a press statement announcing the imposition of a monetary penalty of ₹50,000 (Rupees Fifty Thousand only) on The Arantangi Co-operative Town Bank Limited, Tamil Nadu. The penalty was issued on October 22, 2025, due to non-compliance with certain directions issued by RBI on ‘Declaration of dividend by UCBs’. The penalty was 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.
A statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2024. The inspection revealed non-compliance with RBI directions. A notice was issued to the bank, advising it to show cause as to why penalty should not be imposed 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 that the charge against the bank was sustained, warranting imposition of monetary penalty because the bank had paid dividend from accumulated profits of previous years.
The RBI stated that 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. The imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
The press release number is 2025-2026/1391. Contact Brij Raj, Chief General Manager. Website: www.rbi.org.in. Email: helpdoc@rbi.org.in. Phone: 022 - 2266 0502. The Department of Communication, Central Office, is located at Shahid Bhagat Singh Marg, Fort, Mumbai - 400 001.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator imposing the monetary penalty.
The Arantangi Co-operative Town Bank Limited, Tamil Nadu: The bank on which the monetary penalty is imposed.
Banking Regulation Act, 1949: The act under which powers are exercised for imposing the penalty.
Section 47A(1)(c) read with Sections 46(4)(i) and 56: The specific sections of the Banking Regulation Act, 1949 under which the penalty is imposed.
Declaration of dividend by UCBs: RBI directions on 'Declaration of dividend by UCBs', for non-compliance with which the penalty was imposed.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व ब ैंक
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
October 27, 2025
RBI imposes monetary penalty on The Arantangi Co-operative Town Bank
Limited, Tamil Nadu
The Reserve Bank of India (RBI) has, by an order dated October 22, 2025, imposed
a monetary penalty of ₹50,000/- (Rupees Fifty Thousand only) on The Arantangi
Co-operative Town Bank Limited, Tamil Nadu (the bank) for non-compliance with
certain directions issued by RBI on ‘Declaration of dividend by UCBs’. 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 charge against the bank was sustained, warranting
imposition of monetary penalty:
The bank had paid dividend from accumulated profits of previous years.
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.
(Brij Raj)
Press Release: 2025-2026/1391 Chief General Manager