Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
18 Jul 2024
Case Brief
By an order dated July 15, 2024, RBI imposed a monetary penalty of Rs 50,000 on The District Co-operative Central Bank Limited, Vizianagaram, Andhra Pradesh. The penalty was imposed for non-compliance with NABARD directions on 'Frauds - Guidelines for Classification, Reporting and Monitoring', after RBI sustained the charge that there had been delay in reporting frauds to NABARD. RBI stated that the action was based on regulatory compliance deficiency and did not pronounce on the validity of any transaction or agreement with customers.
Why RBI Acted
RBI imposed a monetary penalty because, based on supervisory findings from NABARD's statutory inspection and related correspondence, the bank was found to have failed to comply with NABARD's directions on 'Frauds - Guidelines for Classification, Reporting and Monitoring'. The sustained charge specifically mentioned delay in reporting of frauds to NABARD, leading RBI to conclude that monetary penalty was warranted 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 monetary penalty and address the compliance lapse identified by RBI/NABARD, especially the timeliness of fraud reporting. The release does not impose any new operational restriction, but it signals that RBI may initiate additional action if warranted.
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 50,000
- Order Date
- 15 Jul 2024
- Effective From
- 15 Jul 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank