The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 50,000 on The Tamilnadu Circle Postal Co-operative Bank Limited, Tamil Nadu, for non-compliance with RBI directions on exposure norms and statutory restrictions applicable to Urban Co-operative Banks (UCBs).

The penalty was imposed through an order dated December 15, 2025, under the powers conferred by Section 47A of the Banking Regulation Act, 1949, read with Sections 46 and 56.

RBI said the action followed a statutory inspection of the bank conducted with reference to its financial position as on March 31, 2025. Based on supervisory findings, the central bank issued a show-cause notice to the bank and, after considering its written and oral submissions, concluded that the violation warranted a monetary penalty.

The bank was found to have sanctioned advances against term deposits to non-members despite not meeting the criteria prescribed for Financially Sound and Well Managed (FSWM) Urban Co-operative Banks.

RBI clarified that the penalty is based on deficiencies in regulatory compliance and does not reflect on the validity of any transactions or agreements entered into by the bank with its customers. The action is without prejudice to any further measures that may be initiated by the regulator.