Case Brief
What Happened
RBI, by order dated October 26, 2021, imposed a monetary penalty of ₹90 lakh on Vasai Vikas Sahakari Bank Ltd., Vasai, Maharashtra. The penalty was levied for non-compliance with RBI directions on Management of Advances - UCBs and Income Recognition, Asset Classification, Provisioning and Other Related Matters - UCBs, specific directions issued in RBI’s letter dated November 22, 2018, and provisions of section 31 read with section 56 of the Banking Regulation Act, 1949. RBI’s inspection found that the bank had not ensured end-use of funds in borrowal accounts, had not properly classified loans/advances as non-performing assets, and had failed to ensure that its balance sheet and profit & loss account were signed by at least three directors as required. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the contraventions were substantiated.