Recorded RBI impact
Fine: Rs 50.0 L
Monetary penalty · Fresh imposition
Published by RBI
18 Mar 2021
Case Brief
RBI, by order dated March 17, 2021, imposed a monetary penalty of ₹50 lakh on The Irinjalakuda Town Co-operative Bank Ltd. No.55, Irinjalakuda, Thrissur District, Kerala. The penalty was levied for contravention of and non-compliance with RBI directions on 'Income Recognition and Asset Classification' and 'Management of Advances – UCBs'. RBI said the action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS), after an inspection based on the bank's financial position as on March 31, 2019, a show-cause notice, and consideration of the bank's reply and oral submissions.
Why RBI Acted
Based on an inspection as on March 31, 2019, RBI found that the bank had contravened/non-complied with RBI directions on 'Income Recognition, Asset Classification, Provisioning and Other related matters' and on 'Management of Advances - UCBs'. After a show-cause notice, written reply and oral hearing, RBI concluded the charges were substantiated and imposed a monetary penalty 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 bear the financial penalty; the release does not indicate any further operational restriction. The finding may affect supervisory scrutiny, but the action itself is limited to the imposed fine and does not directly restrict customers or counterparties.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 50.0 L
- Order Date
- 17 Mar 2021
- Effective From
- 17 Mar 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank