The Reserve Bank of India (RBI) has imposed monetary penalties on two cooperative banks in Tamil Nadu for non-compliance with regulatory directions, according to orders issued on December 15, 2025.
The central bank has levied a penalty of Rs 50,000 on The Tamil Nadu Circle Postal Co-operative Bank Limited, Tamil Nadu. The penalty was imposed for non-compliance with RBI directions related to ‘Exposure Norms and Statutory / Other Restrictions – Urban Co-operative Banks (UCBs)’.
In a separate order, the RBI imposed a higher penalty of Rs 2.50 lakh on The Arakonam Co-operative Urban Bank Limited, Tamil Nadu. The penalty was levied for contravention of the provisions of Section 17 read with Section 56 of the Banking Regulation Act, 1949, along with non-compliance with RBI directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’, ‘Management of Advances – UCBs’ and ‘Know Your Customer (KYC)’ guidelines.
The RBI clarified that the penalties are based on deficiencies in regulatory compliance and are not intended to question the validity of any transaction or agreement entered into by the banks with their customers.
