RBI imposes monetary penalty on The District Co-operative Central Bank Ltd., Mahabubnagar, Telangana
Case Brief
RBI imposed a monetary penalty on The District Co-operative Central Bank Ltd., Mahabubnagar, Telangana for non-compliance with NABARD directions relating to review, classification, reporting and monitoring of frauds. Following statutory inspection, RBI concluded that the bank had failed to report fraud cases to NABARD within the required timeline, and therefore imposed a penalty under the Banking Regulation Act, 1949.
Based on statutory inspection and examination of the inspection report and related correspondence, RBI found that The District Co-operative Central Bank Ltd., Mahabubnagar, Telangana had not reported fraud cases to NABARD within the prescribed timeline. The penalty was imposed for non-compliance with NABARD's directions on 'Review of Frauds – Guidelines on Monitoring and Reporting System' read with 'Frauds - Guidelines for Classification, Reporting and Monitoring of Frauds' under Section 47-A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Severity Assessment
This is a monetary penalty of Rs 10,000, which falls within the lowest monetary band (<= Rs 5 lakh) and has no additional operational restriction.
The bank must absorb the financial penalty and address its reporting controls so that fraud cases are reported to NABARD on time going forward. The order does not invalidate any customer transaction, but it signals supervisory concern over compliance and reporting processes.
Published as The District Co-operative Central Bank Ltd., Mahabubnagar, Telangana
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