Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
6 May 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1,50,000 on Odisha Gramya Bank by order dated April 09, 2024. The penalty was levied after a statutory inspection by NABARD and a show-cause process, with RBI concluding that the bank had not complied with its directions on strengthening prudential norms and on RRB income recognition, asset classification and provisioning norms for non-performing assets. RBI sustained the charge that certain loan accounts were not classified as NPAs, causing divergence in asset classification. The action was taken 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 Odisha Gramya Bank under section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949. The action followed NABARD’s statutory inspection as of March 31, 2023, supervisory findings of non-compliance with RBI directions on strengthening of prudential norms and RRB income recognition, asset classification and provisioning norms for NPAs, and a show-cause process. RBI sustained the charge that the bank failed to classify certain loan accounts as NPAs, which resulted in divergence in asset classification of loan accounts.
Operating Impact
Odisha Gramya Bank must absorb the penalty and address the underlying compliance weaknesses in asset classification, provisioning and NPA recognition. The order does not itself alter customer contracts, but RBI may initiate other action if warranted, and the findings signal continued supervisory scrutiny.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.50 L
- Order Date
- 9 Apr 2024
- Effective From
- 9 Apr 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank