Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
10 Jun 2024
Case Brief
RBI, by order dated June 05, 2024, imposed a monetary penalty of ₹50,000 on The Prakasam District Co-operative Central Bank Ltd, Ongole, Andhra Pradesh. The action followed a statutory inspection by NABARD and a show-cause process concerning non-compliance with NABARD’s directions on ‘Frauds - Guidelines for Classification, Reporting and Monitoring’. RBI found that the charge of delay in reporting of fraud to NABARD was sustained and therefore warranted the penalty, exercised under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection by NABARD found non-compliance with NABARD directions concerning ‘Frauds - Guidelines for Classification, Reporting and Monitoring’. A show-cause notice was issued, and after considering the bank’s reply and oral submissions, RBI held that the charge of delay in reporting of fraud to NABARD was sustained. The penalty was imposed 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 penalty and continue complying with NABARD/RBI fraud-reporting requirements. The order does not by itself restrict operations or invalidate any customer transaction, but it signals supervisory scrutiny and leaves the bank exposed to any further RBI action.
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
- 5 Jun 2024
- Effective From
- 5 Jun 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank