Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
27 Oct 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Shevapet Urban Co-operative Bank Limited, Tamil Nadu, by order dated October 23, 2025. RBI found that the bank had failed to comply with directions under 'Exposure Norms and Statutory / Other Restrictions – UCBs' by sanctioning loans above the prescribed regulatory limit to certain nominal members. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after inspection, notice, reply, and personal hearing.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory review found that the bank had not complied with certain RBI directions issued under 'Exposure Norms and Statutory / Other Restrictions – UCBs'. The sustained charge was that the bank sanctioned loans beyond the prescribed regulatory limit to certain nominal members, in violation of the applicable regulatory directions. RBI stated the action was taken 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 penalty and remain exposed to any further RBI action on the same or related compliance issues. The release does not describe a direct business restriction, but it signals continued supervisory scrutiny over the bank's lending exposure practices, especially to nominal members.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 23 Oct 2025
- Effective From
- 23 Oct 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank