Recorded RBI impact
Fine: Rs 10.0 L
Monetary penalty · Fresh imposition
Published by RBI
29 Aug 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 10 lakh on The Darussalam Co-operative Urban Bank Ltd., Hyderabad, Telangana, by order dated August 22, 2022. RBI found that the bank had violated or failed to comply with directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and Board of Directors-UCBs, based on inspection findings as of March 31, 2020. After considering the bank’s reply and oral submissions, RBI concluded that the charges were substantiated and warranted the penalty under the Banking Regulation Act, 1949 (AACS).
Why RBI Acted
RBI imposed a monetary penalty after an inspection found violation / non-compliance with directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and Board of Directors-UCBs. RBI said the bank failed to adhere to these directions; after considering the bank’s reply and oral submissions, the charges were found substantiated 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 financial penalty, and the action serves as a regulatory censure for non-compliance with RBI directions. There is no stated restriction on ongoing operations in this release, but the finding underscores the need for continued compliance with RBI norms on asset classification, provisioning, and governance.
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
- 22 Aug 2022
- Effective From
- 22 Aug 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank