RBI Imposes Monetary Penalty Co-operative Bank; Check Reason and Name of Bank

RBI Imposes Monetary Penalty Co-operative Bank; Check Reason and Name of Bank The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.15.00 lakh (Rupees Fifteen lakh only) on The Akola Urban Co-operative Bank Ltd., Akola, Maharashtra (the bank) for non-compliance with RBI directions on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters- UCBs’ (IRAC norms) by an order dated August 10, 2022. This penalty has been issued in accordance with the Banking Regulation Act of 1949's section 46 (4) I and section 56, which grant the RBI certain authority (BR Act). This action is based on a lack of regulatory compliance and is not meant to invalidate any agreements or transactions made by the bank with its clients.

Background

The bank was subjected to a statutory inspection by the RBI with regard to its financial position as of March 31, 2020, which included an examination of the Risk Assessment Report and all related correspondence. This revealed, among other things, that the bank had disobeyed RBI instructions regarding IRAC norms. A notice was sent to the bank in response to this, instructing it to provide justification for not imposing a fine for failing to follow the RBI's instructions as indicated in the notice. The RBI concluded that the aforementioned charge of non-compliance with the RBI directions was proved and warranted imposition of a monetary penalty after taking into account the bank's response to the notification.