Recorded RBI impact
Fine: Rs 12.0 L
Monetary penalty · Fresh imposition
Published by RBI
7 Mar 2022
Case Brief
By an order dated March 04, 2022, RBI imposed a monetary penalty of ₹12.00 lakh on The Agrasen Co-operative Urban Bank Ltd., Hyderabad, Telangana. The penalty was imposed for non-adherence / violation of RBI directions on income recognition, asset classification, provisioning, and exposure norms / statutory / other restrictions applicable to UCBs. RBI said the action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a snap scrutiny and statutory inspection found non-compliance. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the charges were substantiated.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The bank’s scrutiny and statutory inspection revealed non-compliance with RBI directions on ‘Income Recognition, Asset Classification, Provisioning’ and ‘Exposure norms/ Statutory / Other Restrictions-UCBs’ (also referred to as ‘Income Recognition, Asset Classification, Provisioning and Other related Matter-UCBs’ and ‘Exposure Norms and Statutory / Other Restrictions – UCBs’). RBI concluded that the charges were substantiated after considering the bank’s reply and oral submissions.
Operating Impact
The bank must absorb the financial penalty and continue complying with RBI directions on asset classification, provisioning, and exposure norms. The action does not invalidate customer transactions, but it underscores ongoing supervisory expectations for regulatory compliance at the bank.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 12.0 L
- Order Date
- 4 Mar 2022
- Effective From
- 4 Mar 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank