Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
22 Aug 2024
Case Brief
By an order dated August 08, 2024, RBI imposed a monetary penalty of ₹2.00 lakh on Maharashtra Nagari Sahakari Bank Limited, Latur, Maharashtra. The action was taken for non-compliance with RBI directions on Income Recognition and Asset Classification (IRAC) norms and for contravention of section 26A read with section 56 of the Banking Regulation Act, 1949. RBI said its inspection found that certain loan accounts were not classified as NPA, resulting in divergence in asset classification, and that the bank had not transferred the eligible amount to the Depositors Education and Awareness Fund within the prescribed time. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found supervisory deficiencies and non-compliance with RBI directions and statutory provisions. The sustained charges included failure to classify certain loan accounts as NPA, leading to divergence in asset classification, and failure to transfer the eligible amount to the Depositors Education and Awareness Fund within the prescribed time period. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the ₹2 lakh penalty and address the compliance gaps identified by RBI, including asset classification practices and timely transfer to the Depositors Education and Awareness Fund. The order does not by itself impose an operational restriction on customers, but it signals continued supervisory scrutiny and possible further action by RBI.
Regulatory Basis
- section 26A read with section 56 of the Banking Regulation Act, 1949
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 8 Aug 2024
- Effective From
- 8 Aug 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank