Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
29 Dec 2025
Case Brief
RBI imposed a monetary penalty on The Salem Urban Co-operative Bank Limited, Tamil Nadu by order dated December 26, 2025. The penalty was issued under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for non-compliance with RBI directions on the Framework for Compromise Settlements and Technical Write-offs. RBI found that the bank sanctioned non-agricultural loans to members who had previously availed compromise settlements without observing the prescribed minimum cooling period.
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 found non-compliance with RBI directions on the 'Framework for Compromise Settlements and Technical Write-offs'. The sustained charge was that the bank sanctioned non-agricultural loans to members who had previously availed compromise settlements without adhering to the prescribed minimum cooling period.
Operating Impact
The bank must absorb the penalty and may remain exposed to any further regulatory action RBI chooses to initiate. There is no stated operational restriction or customer-facing prohibition in this release, but the finding highlights compliance expectations around lending to borrowers who have undergone compromise settlements.
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
- 26 Dec 2025
- Effective From
- 26 Dec 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank