Recorded RBI impact
Fine: Rs 15.0 L
Monetary penalty · Fresh imposition
Published by RBI
17 Aug 2022
Case Brief
By an order dated August 10, 2022, RBI imposed a monetary penalty of Rs 15.00 lakh on The Akola Urban Co-operative Bank Ltd., Akola, Maharashtra for non-compliance with RBI directions on Income Recognition, Asset Classification, Provisioning and Other Related Matters (IRAC norms). RBI said the violation was identified during its statutory inspection with reference to the bank's financial position as on March 31, 2020, and after examination of the Risk Assessment Report and related correspondence. Following a show-cause notice and review of the bank's reply, RBI concluded the charge was substantiated and warranted monetary penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and review of the Risk Assessment Report and related correspondence found that the bank had failed to comply with RBI directions on 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 considering the bank's reply to the show-cause notice.
Operating Impact
The bank must bear the monetary penalty and address the compliance gaps that led to the IRAC-norms breach. The action does not by itself invalidate customer transactions, but it signals regulatory scrutiny over the bank's compliance framework.
Regulatory Basis
- Section 47 A (1) (c) read with sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 15.0 L
- Order Date
- 10 Aug 2022
- Effective From
- 10 Aug 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank