Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
3 Oct 2025
Case Brief
By an order dated September 29, 2025, RBI imposed a monetary penalty of ₹1 lakh on The Vaniyambadi Town Co-operative Bank Limited, Tamil Nadu. The penalty was imposed after supervisory inspection findings showed non-compliance with RBI directions under the Supervisory Action Framework (SAF) and KYC requirements. RBI said the bank had sanctioned fresh loans beyond single-borrower exposure limits, extended fresh loans carrying risk weights above 100%, and failed to upload customer KYC records to CKYCR within the prescribed timeline. RBI stated that the penalty is based on regulatory deficiencies and does not pronounce on the validity of any transaction or agreement with customers.
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 its inspection and subsequent proceedings found the bank had violated specific directions issued under the Supervisory Action Framework (SAF) and certain KYC directions. The sustained charges included sanctioning fresh loans and advances beyond the applicable single borrower exposure limits and sanctioning fresh loans and advances carrying risk weights of more than 100%, as well as failing to upload customer KYC records to the Central KYC Records Registry (CKYCR) within the prescribed timeline.
Operating Impact
The bank must absorb the penalty and address the compliance lapses identified by RBI, especially in lending exposure controls and KYC record reporting. The order does not itself impose a business restriction, but RBI indicated that other action may still be initiated separately.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 29 Sept 2025
- Effective From
- 29 Sept 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank