Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
8 Aug 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Garha Co-operative Bank Limited, Guna (M.P.) by order dated August 04, 2022. The penalty was imposed because an inspection found contravention of and non-compliance with RBI directions issued to urban cooperative banks on Income Recognition and Asset Classification (IRAC). RBI issued a show-cause notice, reviewed the bank’s reply and oral submissions, and held that the charge was substantiated under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after an inspection revealed that the bank had not complied with RBI’s directions to urban cooperative banks on Income Recognition and Asset Classification (IRAC). RBI issued a show-cause notice, considered the bank's replies and oral submissions, and concluded that the charge of non-compliance was substantiated.
Operating Impact
The bank must bear the penalty and continue complying with RBI’s IRAC directions for urban cooperative banks. The action does not invalidate customer transactions or agreements, but it signals a regulatory compliance deficiency and may invite closer supervisory attention.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 4 Aug 2022
- Effective From
- 4 Aug 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank