RBI Imposes ₹1 Lakh Penalty on Kovilpatti Cooperative Urban Bank
Moneylife Digital Team 16 December 2025
Reserve Bank of India (RBI) has imposed a penalty of ₹1 lakh on the Tamil Nadu-based Kovilpatti Cooperative Urban Bank for non-compliance with directions issued by the banking regulator.
 
Kovilpatti Cooperative Urban Bank has been penalised for non-compliance with directions issued by RBI on prudential norms for capital adequacy of primary urban cooperative banks (UCBs).
 
RBI’s statutory inspection revealed that Kovilpatti Cooperative Urban Bank also refunded share capital to its members and sanctioned certain loans without complying with the mandatory share-linking norms for borrowings, even though its capital-to-risk-weighted assets ratio (CRAR) was below the prescribed regulatory minimum.
 
After considering the reply and oral submissions of Kovilpatti Cooperative Urban Bank during the personal hearing, RBI states that it has concluded that the non-compliance with its directions was substantiated and warranted the imposition of a monetary penalty.
 
RBI says the penalty imposed on Kovilpatti Cooperative Urban Bank is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered by the banks with their customers.
Comments
Free Helpline
Legal Credit
Feedback