Document title: RBI imposes monetary penalty on The Lalgudi Co-operative Urban Bank Ltd., Tamil Nadu
Issuing authority: Reserve Bank of India
Reference number: Press Release: 2026-2027/542
Date: 25 June 2026
Banking and Credit
The RBI’s statutory inspection of The Lalgudi Co-operative Urban Bank Ltd. examined its financial position as of 31 March 2025. The inspection found the bank’s Capital to Risk (Weighted) Assets Ratio (CRAR) was below the regulatory minimum. Additionally, the bank had refunded share capital to its members and sanctioned loans without adhering to the share‑linking to borrowing norms mandated for urban cooperative banks.
Regulatory and Policy Measures
Pursuant to Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, the RBI issued an order dated 22 June 2026 imposing a monetary penalty of ₹1 lakh on the bank for non‑compliance with the Prudential Norms on Capital Adequacy – Primary (Urban) Cooperative Banks. The bank was earlier served a show‑cause notice and, after considering its reply and oral submissions at a personal hearing, the RBI sustained the charges and imposed the penalty without prejudice to any further action.
The enforcement underscores the RBI’s commitment to ensuring urban cooperative banks maintain required capital adequacy and adhere to share‑linking norms, signalling that regulatory breaches will attract monetary penalties and potential further supervisory action.