**Executive Summary**
This press release, dated November 24, 2025, announces that the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 lakh on Tumkur Grain Merchants Co-operative Bank Limited, Karnataka. The penalty was issued on November 20, 2025, due to non-compliance with specific directions issued by RBI under the Supervisory Action Framework (SAF). The penalty is 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 Tumkur Grain Merchants Co-operative Bank Limited, Karnataka.
* The penalty was imposed via an order dated November 20, 2025.
* **Reason for Penalty:**
* The penalty is for non-compliance with specific directions issued by RBI under the Supervisory Action Framework (SAF).
* The action is based on deficiencies in regulatory compliance, discovered during the statutory inspection of the bank as of March 31, 2024.
* **Grounds for Penalty:**
* Sanctioned fresh loans and advances carrying risk-weight of more than 100%.
* Offered interest rates on fixed deposits higher than those offered by the State Bank of India.
* Sanctioned/renewed credit facilities to sectors having a high level of NPA/defaults.
* **Legal Basis:**
* The 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.
* **Disclaimer:**
* The action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
* The imposition of the monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
**Impact Analysis**
**Tumkur Grain Merchants Co-operative Bank Limited, Karnataka**
* **Impact:**
* The bank is subject to a monetary penalty of ₹1 lakh.
* The bank's reputation and operations may be affected by this action.
* The bank may face further scrutiny from the RBI.
* **Action Required:**
* The bank must pay the penalty of ₹1 lakh.
* The bank must address the identified deficiencies in regulatory compliance to avoid further penalties.
* The bank must ensure compliance with all RBI directions under the Supervisory Action Framework (SAF).
Key Entities Referenced
Banking Regulation Act, 1949: The act under which the penalty was imposed.
Supervisory Action Framework (SAF): RBI framework under which directions were issued for non-compliance, leading to the penalty.
Reserve Bank of India (RBI): The regulator imposing the monetary penalty.
Tumkur Grain Merchants Co-operative Bank Limited, Karnataka: 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
November 24, 2025
RBI imposes monetary penalty on Tumkur Grain Merchants Co-operative Bank
Limited, Karnataka
The Reserve Bank of India (RBI) has, by an order dated November 20, 2025,
imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on Tumkur Grain
Merchants Co-operative Bank Limited, Karnataka (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 charge against the bank was sustained,
warranting imposition of monetary penalty:
In non-adherence to directions issued under SAF, the bank had:
i. sanctioned fresh loans and advances carrying risk- weight of more than 100%;
ii. offered interest rates on fixed deposits higher than those offered by the State
Bank of India; and
iii. sanctioned / renewed credit facilities to sector having high level of NPA /
defaults.
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: 2025-2026/1558 Chief General Manager