RBI imposes Rs 3 lakh penalty on Indrayani Co-operative Bank Ltd, Pimpri

By: Pune Pulse

October 24, 2023

Pune: On September 25, 2023, the Reserve Bank of India (RBI) issued an order imposing a monetary penalty of Rs 3 lakh on Indrayani Co-operative Bank Ltd. located in Pimpri, Maharashtra.

As per the information provided, the penalty was imposed due to the bank’s non-compliance with the directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’ and ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’.

This penalty has been imposed in accordance with the powers granted to RBI under the provisions of section 47-A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949. It is important to note that this action is solely based on the deficiencies in regulatory compliance and does not intend to pass judgment on the validity of any transaction or agreement entered into by the bank with its customers.

The bank’s financial position as of March 31, 2022, was subject to a statutory inspection by the RBI. Upon examination of the Inspection Report, Risk Assessment Report, and related correspondence, it was discovered that the bank had failed to adhere to Prudential Norms regarding Income Recognition, Asset Classification, and Provisioning. Additionally, the bank had not implemented a system for periodic updation of KYC for its customers.

As a result, the RBI issued a notice to the bank, requesting an explanation as to why a penalty should not be imposed for non-compliance with the aforementioned directions. After reviewing the bank’s response and oral submissions during the personal hearing, the RBI determined that the bank had indeed failed to comply with the directions and imposed a monetary penalty.

Madhupriya Dhanwate