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Kakinada Co-operative Town Bank Ltd

Co-operative bankKakinada, Andhra Pradesh

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 10.0 L

Monetary penalty · Fresh imposition

S2

Published by RBI

29 Aug 2022

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹10 lakh on Kakinada Co-operative Town Bank Ltd, Kakinada, East Godavari District, Andhra Pradesh. RBI said the bank had failed to adhere to directions on income recognition, asset classification, provisioning and other related matters applicable to UCBs, and had also failed to transfer eligible balances to the Depositor Education and Awareness Fund. 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 non-compliance substantiated. RBI also clarified that the action was based on regulatory deficiencies and was not intended to pronounce on the validity of any transaction or agreement with customers.

Why RBI Acted

Reporting & disclosureGovernance oversight

RBI imposed a monetary penalty after an inspection found that the bank had violated / not complied with directions issued under Income Recognition, Asset Classification, Provisioning and Other Related Matters for Urban Cooperative Banks, and had failed to transfer eligible balances to the Depositor Education and Awareness Fund. 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 concluded the charges were substantiated.

Operating Impact

The bank must absorb the financial penalty and address the compliance lapses identified by RBI. The action does not by itself invalidate customer transactions, but it signals supervisory concern over regulatory compliance and may prompt tighter internal controls and remediation around classification, provisioning, and transfer of eligible balances.

Regulatory Basis

  • Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 (AACS)

Action Facts

Primary Impact
Fine: Rs 10.0 L
Order Date
22 Aug 2022
Effective From
22 Aug 2022
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank