Recorded RBI impact
Fine: Rs 55.0 L
Monetary penalty · Fresh imposition
Published by RBI
29 Aug 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 55.00 lakh on The Visakhapatnam Co-operative Bank Ltd, Visakhapatnam, Andhra Pradesh, by an order dated August 25, 2022. RBI said the bank had not adhered to or had violated directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and Finance for Housing Schemes-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 (AACS), after an inspection based on the bank's financial position as on March 31, 2020 and after considering the bank's reply and oral submissions.
Why RBI Acted
RBI imposed a monetary penalty after an inspection found that the bank had violated or not complied with directions issued under 'Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs' and 'Finance for Housing Schemes-UCBs'. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the charges of non-compliance were substantiated under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Operating Impact
The bank must absorb the financial penalty, but the release does not describe any operational restriction, cancellation, or suspension. The consequences are limited to the penalty and the compliance signal for future adherence to RBI directions, with no direct customer-facing cap or ban stated.
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 55.0 L
- Order Date
- 25 Aug 2022
- Effective From
- 25 Aug 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank