Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
7 Mar 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹2 lakh on The Krishna District Cooperative Central Bank Ltd., Machilipatnam, Krishna District, Andhra Pradesh, by order dated March 2, 2022. RBI said the bank had not adhered to directions in the RBI circular on Income Recognition, Asset Classification and Provisioning and the NABARD circular on Frauds—Guidelines for classification, reporting and monitoring of Frauds. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after an inspection and subsequent show-cause process found the charges substantiated.
Why RBI Acted
RBI imposed a monetary penalty after inspection revealed violations/non-compliance with directions contained in the RBI Circular on 'Income Recognition, Asset Classification and Provisioning' and the NABARD circular on 'Frauds-Guidelines for classification, reporting and monitoring of Frauds'. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after RBI found the bank's reply and oral submissions did not rebut the charges.
Operating Impact
The bank must absorb the monetary penalty; the release does not mention any restriction on operations or customer services. The finding signals regulatory non-compliance, but RBI explicitly notes the penalty is not intended to pronounce on the validity of any transaction or agreement with customers.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 2 Mar 2022
- Effective From
- 2 Mar 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank