Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
12 Dec 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty on Wai Urban Co-operative Bank Ltd., Satara for non-compliance with its directions on Income Recognition, Asset Classification, Provisioning and Other Related Matters (IRAC norms). RBI's inspection found that the bank had not classified certain loan accounts as non-performing assets in accordance with the norms. After a show-cause notice, the bank's written and oral submissions were considered, and RBI concluded that the violation was substantiated. The penalty was imposed 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 under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after its statutory inspection and subsequent examination found that the bank had failed to classify certain loan accounts as non-performing assets in line with IRAC norms. RBI issued a show-cause notice, considered the bank's reply, additional submissions and oral submissions, and concluded that the contravention of RBI directions was substantiated.
Operating Impact
The bank must bear the Rs 2 lakh penalty; the release does not describe any operating restriction, but it underscores RBI's expectation that the bank comply with IRAC norms for NPA classification and related provisioning going forward. Depositors and counterparties are not subject to a direct new restriction from this order.
Regulatory Basis
- section 47 A (1) (c) read with sections 46 (4) (i) and 56 of Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 8 Dec 2022
- Effective From
- 8 Dec 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank