Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
28 Mar 2025
Case Brief
RBI, by order dated March 26, 2025, imposed a monetary penalty of ₹1.00 lakh on Karnataka Gramin Bank, Karnataka for non-compliance with RBI directions on prudential norms, provisioning, asset classification and exposure limits, read with income recognition, asset classification and provisioning norms. After inspection and subsequent notice, RBI sustained the charge that the bank failed to classify certain loan accounts as non-performing assets. The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty on Karnataka Gramin Bank for non-compliance with certain RBI directions on strengthening prudential norms, provisioning, asset classification and exposure limits, read with income recognition, asset classification and provisioning norms. The charge sustained was that the bank failed to classify certain loan accounts as non-performing assets. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty; no business restriction is described in the release. The finding may also leave the bank exposed to any further supervisory or enforcement action RBI may choose to initiate. Customers are not subject to any direct operational change from this order.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 51(1) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 26 Mar 2025
- Effective From
- 26 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank