Recorded RBI impact
Fine: Rs 10,000
Monetary penalty · Fresh imposition
Published by RBI
16 May 2023
Case Brief
RBI, by an order dated May 11, 2023, imposed a monetary penalty of Rs 10,000 on Manipur Rural Bank, Imphal. The penalty was levied for contravention of RBI directions on prudential norms, provisioning, asset classification and exposure limits, as well as RBI's IRAC norms for NPAs. NABARD's inspection found that the bank had failed to classify certain loan accounts as non-performing, and RBI held the non-compliance substantiated after considering the bank's response and hearing.
Why RBI Acted
RBI imposed a monetary penalty on Manipur Rural Bank under Section 47A(1)(c) read with Section 46(4)(i) and Section 51(1) of the Banking Regulation Act, 1949. The penalty was for contravention/non-adherence with RBI directions on 'Strengthening of Prudential Norms - Provisioning, Asset Classification and Exposure Limit' and 'Regional Rural Banks - Income Recognition, Asset Classification and Provisioning Norms - Non-Performing Assets (NPAs)'. NABARD's statutory inspection found that the bank had failed to classify certain loan accounts as non-performing in accordance with IRAC norms, and RBI concluded the non-compliance was substantiated after considering the bank's reply and hearing submissions.
Operating Impact
Manipur Rural Bank must absorb the monetary penalty and the finding of non-compliance. The release does not indicate any operational restriction, but it underscores that the bank must align its loan classification, provisioning and prudential compliance practices with RBI norms going forward.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)(i)
- Section 51(1)
- Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 10,000
- Order Date
- 11 May 2023
- Effective From
- 11 May 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank