Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
30 Jan 2023
Case Brief
RBI imposed a monetary penalty on Ilkal Co-operative Bank Ltd., Ilkal, Karnataka by order dated January 23, 2023. The bank was found to have violated RBI directions on income recognition, asset classification, provisioning and other related matters for UCBs, specifically by incorrectly classifying certain non-performing accounts as standard assets. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS), after RBI considered the bank's reply and oral submissions and found the charge substantiated.
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 (AACS) after an inspection based on the bank's financial position as on March 31, 2021 found that certain non-performing accounts were incorrectly classified as standard assets. After a show-cause notice, reply, and oral submissions, RBI concluded that the non-compliance with the directions on income recognition, asset classification, provisioning and other related matters was substantiated.
Operating Impact
The bank must absorb the ₹1 lakh penalty and remain compliant with RBI directions on classification and provisioning going forward. The action does not state any restriction on banking operations, but it signals continued regulatory scrutiny over asset classification practices.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 23 Jan 2023
- Effective From
- 23 Jan 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank