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Priyadarshini Urban Co-operative Bank Ltd, Adoni, Kurnool District, Andhra Pradesh

Co-operative bankAdoni, 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

18 Mar 2021

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 10 lakh on Priyadarshini Urban Co-operative Bank Ltd, Adoni, Kurnool District, Andhra Pradesh. The penalty was based on inspection findings showing contravention/non-compliance with RBI directions on sanction of loans to directors, income recognition, asset classification, provisioning norms, and exposure norms. RBI said the bank failed to adhere to the relevant directions, considered the bank's reply and hearing submissions, and imposed the penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS). RBI also clarified that the action is only for regulatory non-compliance and does not pronounce on the validity of any customer transaction or agreement.

Why RBI Acted

Lending normsReporting & disclosureCapital & exposure norms

RBI imposed a monetary penalty after an inspection of the bank (financial position as on March 31, 2019) revealed contraventions / non-compliance with RBI directions on sanction of loans to directors, income recognition, asset classification, provisioning norms, and exposure norms. RBI issued a show-cause notice, considered the bank's written reply and oral submissions, and concluded that the charges were substantiated. 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).

Operating Impact

The bank must absorb the monetary penalty and address the compliance deficiencies identified by RBI. The order does not itself impose an operational restriction, but it signals continued regulatory scrutiny over lending to directors, asset classification, provisioning, and exposure-limit compliance.

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
17 Mar 2021
Effective From
17 Mar 2021
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank