Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
13 Nov 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.50 lakh on The Mettupalayam Co-operative Urban Bank Limited, Tamil Nadu, after finding non-compliance with RBI directions on loans and advances to directors, their relatives, and related firms/concerns, as well as exposure norms and statutory/other restrictions applicable to UCBs. Following supervisory inspection, RBI issued a show-cause notice, considered the bank's reply and oral submissions, and sustained the charges that the bank had sanctioned a director-related loan and loans to nominal members beyond the prescribed regulatory limit. The penalty was imposed 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 under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after supervisory inspection and notice proceedings found that the bank had failed to comply with RBI directions on 'Loans and advances to directors, their relatives, and firms/concerns in which they are interested' and 'Exposure Norms and Statutory / Other Restrictions – UCBs'. The sustained charges were that the bank sanctioned a director-related loan and sanctioned loans to nominal members above the prescribed regulatory limit.
Operating Impact
The bank must absorb the monetary penalty; the release does not impose a new operational restriction or suspension. RBI also notes that the penalty is without prejudice to any other action that may be initiated, so further supervisory or enforcement steps remain possible.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.50 L
- Order Date
- 11 Nov 2025
- Effective From
- 11 Nov 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank