Case Brief
What Happened
RBI, by order dated December 15, 2025, imposed a monetary penalty on The Tamilnadu Circle Postal Co-operative Bank Limited, Tamil Nadu. The penalty was levied for non-compliance with RBI directions on 'Exposure Norms and Statutory / Other Restrictions – UCBs', after RBI found during its supervisory inspection that the bank had sanctioned advances against term deposits to non-members despite not meeting the criteria for Financially Sound and Well Managed (FSWM) Urban Co-operative Banks. RBI stated that the penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, and clarified that it does not pronounce on the validity of any transaction or agreement entered into by the bank with its customers.