Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹2.00 lakh on The Kamaraj Co-operative Town Bank Limited, Tamil Nadu, following a statutory inspection with reference to its financial position as on March 31, 2023. RBI found that the bank had violated directions issued under the Supervisory Action Framework, prudential norms on capital adequacy for UCBs, and KYC requirements. Specific violations included sanctioning loans beyond the eligible single borrower exposure limit, granting fresh loans and advances carrying risk weights above 100%, not following share-linking norms for borrowings despite CRAR being below the regulatory minimum, allowing refund of share capital to members despite low CRAR, and failing to upload KYC records to CKYCR within the prescribed timeline. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.