The Reserve Bank of India (RBI) has imposed a Rs 50,000 penalty on The Nilambur Co-operative Urban Bank Limited, Kerala, for breaching its directives on interest rates for deposits.

The order, dated September 25, 2025, follows an RBI inspection of the bank’s financials as of March 31, 2024. The regulator found that the bank offered higher interest rates on Non-Resident (External) rupee deposits than on corresponding domestic term deposits, violating RBI guidelines.

RBI noted that the penalty is for regulatory non-compliance and does not question the validity of any customer transactions. This action is without prejudice to any further measures that RBI may take against the bank.