Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
29 Aug 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on The Ottapalam Co-operative Urban Bank Ltd., Ottapalam, Kerala. The penalty was levied for violation / non-compliance with RBI directions relating to income recognition, asset classification, provisioning and other related matters for urban co-operative banks, as well as KYC guidelines for primary (urban) co-operative banks, based on inspection findings as of March 31, 2020.
Why RBI Acted
RBI 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) after an inspection found violations / non-compliance with directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and KYC Guidelines for Primary (Urban) Co-operative Banks. The bank’s reply and oral submissions were considered, and the charges were held substantiated.
Operating Impact
The bank must absorb the penalty and remain compliant with RBI prudential and KYC directions going forward. The release does not state any operational restriction on customers, but it signals heightened regulatory scrutiny of the bank’s compliance 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 5.00 L
- Order Date
- 25 Aug 2022
- Effective From
- 25 Aug 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank