The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1.50 lakh on The Mettupalayam Co-operative Urban Bank Limited, Tamil Nadu, for violating certain regulatory directions.
According to the RBI’s order dated November 11, 2025, the penalty was levied for non-compliance with the central bank’s guidelines on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’ and ‘Exposure Norms and Statutory/Other Restrictions for UCBs’.
The action has been taken under the provisions of the Banking Regulation Act, 1949.
An RBI inspection based on the bank’s financial position as of March 31, 2025, revealed that the bank had sanctioned a director-related loan and granted loans to nominal members beyond the prescribed regulatory limit. After issuing a show-cause notice and considering the bank’s written and oral submissions, the RBI concluded that the charges warranted penal action.
