The Reserve Bank of India has imposed a monetary penalty of Rs 49.00 lakh on Bassein Catholic Co-operative Bank, Vasai. The UCB was faulted for non-compliance with the directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters’ (IRAC norms)’.
This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, says RBI in a press release.
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2019 revealed the bank in certain instances had upgraded/ regularised loan accounts of borrowers without recovering overdue amounts. It also failed to classify existing non-performing loan accounts of borrowers as NPAs, on restructuring.
A notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the RBI directions, as stated therein.
After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI came to conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.