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 regulatory directions related to loans and advances to directors and exposure norms for urban co-operative banks (UCBs).
The penalty, announced through an order dated November 11, 2025, was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
An RBI inspection of the bank’s financials as of March 31, 2025, revealed instances of non-compliance, including sanctioning director-related loans and granting loans to nominal members beyond prescribed limits.
RBI clarified that the action was based on deficiencies in regulatory compliance and does not affect the validity of any transactions between the bank and its customers. The central bank also stated that the penalty is without prejudice to further supervisory actions that may be taken against the bank.