Recorded RBI impact
Fine: Rs 10.0 L
Monetary penalty · Fresh imposition
Published by RBI
18 Jun 2021
Case Brief
RBI imposed, by order dated June 17, 2021, a monetary penalty of ₹10 lakh on The Manjeri Co-operative (Urban) Bank Ltd., Manjeri, Malappuram District, Kerala. The penalty was levied under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS) after a statutory inspection found contravention/non-compliance with RBI's Master Circular on Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs and the circular on Management of Advances – UCBs, both dated July 1, 2015. RBI issued a show-cause notice, reviewed the bank's written reply and oral submissions, and concluded that the non-compliance was substantiated. The press release clarifies that the action is based on regulatory compliance deficiencies and is not intended to pronounce upon the validity of any customer transaction or agreement.
Why RBI Acted
RBI imposed a penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS) after a statutory inspection found contravention/non-compliance with RBI's Master Circular on Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs dated July 1, 2015 and the circular on Management of Advances – UCBs dated July 1, 2015. RBI issued a show-cause notice, considered the bank's written and oral submissions, and concluded that the charges of non-compliance were substantiated, warranting a monetary penalty. The release states the penalty is for regulatory compliance deficiencies and does not pronounce on the validity of any transaction or agreement with customers.
Operating Impact
The bank must absorb the monetary penalty and address the compliance gaps identified by RBI. While the release does not impose an operating restriction, it signals supervisory concern over credit classification/provisioning and advances management practices.
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
- 17 Jun 2021
- Effective From
- 17 Jun 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank