Recorded RBI impact
Fine: Rs 50.0 L
Monetary penalty · Fresh imposition
Published by RBI
15 Dec 2020
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹50.00 lakh on The Urban Co-operative Bank Ltd. No. 1758, Perinthalmanna, Malappuram District, Kerala. RBI said the bank failed to comply with its directions on Income Recognition and Asset Classification (IRAC) norms and on Management of Advances-UCBs, based on a statutory inspection as of March 31, 2019. After issuing a show-cause notice and considering the bank's reply, RBI concluded that the non-compliance was substantiated and warranted penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found that the bank had not complied with RBI directions on IRAC norms and on Management of Advances-UCBs. 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 RBI concluded that the charge of non-compliance was substantiated.
Operating Impact
The bank must absorb the financial penalty and the finding of regulatory non-compliance may factor into future supervisory scrutiny. The order does not invalidate customer transactions or agreements, but it signals expectations for improved adherence to IRAC and advances-related RBI directions going forward.
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 50.0 L
- Order Date
- 11 Dec 2020
- Effective From
- 11 Dec 2020
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank