RBI imposes monetary penalty on DCB Bank, Tamilnad Mercantile Bank for rule violations

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26 Aug, 2025 12:21

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The Reserve Bank of India (RBI) on March 19 said it has imposed monetary penalty on DCB Bank and Tamilnad Mercantile Bank for rule violations.

The central bank imposed Rs 63.60 lakh penalty on DCB Bank and Rs 1.32 crore on Tamilnad Mercantile Bank, said a release from the central bank.

Tamilnad Mercantile Bank was penalised as it failed to benchmark the interest rate on certain floating rate loans to MSMEs to an external benchmark lending rate and adopted multiple benchmarks within the same loan category, the RBI said.

Further, the bank also failed to price certain floating rate loans with reference to actual benchmark rate applicable to those loans and wrongly reported external rating of certain borrowers to CRILC, the RBI added.

DCB Bank was penalised as it failed to reset the interest rates at the prescribed periodicity in certain MCLR linked floating rate advances and failed to benchmark the interest rate of certain floating rate retail loans and floating rate loans to MSMEs to an external benchmark lending rate, the release added.

The central bank said actions on banks is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers.