Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Apr 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty on Rajdhani Nagar Sahkari Bank Limited, Lucknow, by order dated March 30, 2024. RBI said the bank had not complied with directions on Income Recognition, Asset Classification, Provisioning and Other Related Matters for UCBs, and specifically sustained the charge that certain loan accounts were not classified as non-performing in accordance with IRAC norms. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection and a show-cause process.
Why RBI Acted
Following a statutory inspection with reference to the bank’s financial position as on March 31, 2022, RBI issued a show-cause notice based on supervisory findings of non-compliance with RBI directions and related correspondence. After considering the bank’s reply, RBI found that the charge of not classifying certain loan accounts as non-performing in accordance with IRAC norms was sustained, and imposed a monetary penalty 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 ₹5 lakh penalty; no business restriction or licence action was announced. The release notes that the penalty is without prejudice to any other action RBI may initiate in the future.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 30 Mar 2024
- Effective From
- 30 Mar 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank