The Reserve Bank of India has imposed a monetary penalty of ?15.00 lakh on the Akola Urban Co-operative Bank Ltd., Akola, Maharashtra.
The UCB was faulted for non-compliance with RBI directions on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters- UCBs’ (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.
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2020, and examination of the Risk Assessment Report and all related correspondence pertaining to the same, revealed, inter alia, that the bank had failed to comply with RBI directions on IRAC norms.
In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the RBI directions, as stated therein.
After considering the bank’s reply to the notice, RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions were substantiated and warranted imposition of monetary penalty.