Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
1 Dec 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Kallidaikurichi Co-operative Urban Bank Limited, Tamil Nadu, by order dated November 27, 2025. RBI said the bank failed to comply with directions on prudential norms for capital adequacy applicable to primary urban co-operative banks. After inspection, notice, reply, and oral hearing, RBI sustained the charge that the bank allowed refund of share capital to members despite its CRAR being below the regulatory minimum. The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty for non-compliance with certain RBI directions on Prudential Norms on Capital Adequacy for Primary (Urban) Co-operative Banks. The sustained charge was that the bank allowed refund of share capital to its members even though its Capital to Risk-Weighted Assets Ratio (CRAR) was less than the regulatory minimum. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and ensure future compliance with RBI’s capital adequacy directions. The release does not describe any operational restriction on customers, but it signals continued supervisory scrutiny and the possibility of further RBI action if similar breaches recur.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 27 Nov 2025
- Effective From
- 27 Nov 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank