The Reserve Bank of India (RBI) has imposed a Rs 1 lakh monetary penalty on Kamaraj Co-operative Town Bank Ltd., Tamil Nadu, for failing to comply with directives under the Supervisory Action Framework (SAF).

The penalty, issued on September 25, 2025, follows an RBI inspection of the bank’s financials as of March 31, 2024. The regulator found multiple lapses, including not reducing single borrower exposure limits, sanctioning fresh loans without adequate collateral, and expanding both the balance sheet and deposits in violation of SAF norms.

RBI emphasized that the penalty addresses regulatory compliance deficiencies and does not affect the validity of any customer transactions. The action is without prejudice to any further measures that the central bank may take against the bank.