The Reserve Bank of India (RBI) has imposed a penalty of Rs 35 lakh on Tamilnad Mercantile Bank (TMB) for violating norms on frauds classification and notification.

The central bank imposed the fine through an order on October 24.

In a statement, the banking regulator said the lender has been penalised for “non-compliance with certain provisions of directions issued by the RBI on frauds classification and reporting by commercial banks and select FIs directions 2016”.

“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the central bank said.

The RBI had conducted a statutory inspection of Tamilnad Mercantile Bank on its financial position as on March 31, 2017, based on which a showcause notice was issued to the bank as to why penalty should not be imposed for non-compliance with the directions.

The RBI added that after considering the bank’s reply to the notice and oral submissions made in a personal hearing, it concluded that the non-compliance warranted imposition of monetary penalty.

Tamilnad Mercantile Bank now has a network of more than 500 branches in the country.

According to its website, deposits stood at Rs 32,190 crore as on March 31, 2017, while advances were at Rs 10,871 crore. For the year ended March 31, 2017, it posted a net profit of Rs 317 crore. TMB is largely focused on retail but also provides personal loans, home and education loan among others.