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Sree Charan Souhardha Co-operative Bank Ltd., Bengaluru

Co-operative bankBengaluru, Karnataka

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 2.00 L

Monetary penalty · Fresh imposition

S1

Published by RBI

7 Nov 2024

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on Sree Charan Souhardha Co-operative Bank Ltd., Bengaluru by order dated November 05, 2024. The penalty was based on supervisory findings from an inspection with reference to the bank’s financial position as on March 31, 2023. RBI said the bank had not complied with certain directions on Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs, as well as specific directions issued under the Supervisory Action Framework. The sustained charges included failure to classify certain loan accounts as non-performing assets, offering deposit rates higher than those of State Bank of India, and sanctioning fresh loans and advances contrary to SAF directions.

Why RBI Acted

Reporting & disclosureLending normsGovernance oversight

RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after a statutory inspection and show-cause process found sustained charges of non-compliance. The bank failed to classify certain loan accounts as non-performing assets in terms of income recognition, asset classification and provisioning norms, offered interest rates on deposits higher than those offered by State Bank of India, and sanctioned fresh loans and advances in non-adherence to directions issued under the Supervisory Action Framework (SAF).

Operating Impact

The bank must absorb the penalty and remain subject to RBI’s supervisory framework; the release does not impose a new operational ban or cancellation. RBI also notes the fine is without prejudice to any other action that may be initiated, so further supervisory or enforcement action remains possible.

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 2.00 L
Order Date
5 Nov 2024
Effective From
5 Nov 2024
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank