Case Brief
What Happened
By an order dated March 18, 2025, RBI imposed a monetary penalty on The Karaikudi Co-operative Town Bank Ltd. for non-compliance with specific directions issued under the Supervisory Action Framework (SAF). RBI said the bank sanctioned fresh loans and advances beyond the applicable single and group borrower exposure limits and without the prescribed collateral security (term deposits, NSCs, KVPs, or insurance policies). The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank’s reply and oral submissions.