Mumbai (Maharashtra) [India], August 29 (ANI): The Reserve Bank of India (RBI) said on Monday it has imposed a monetary penalty of Rs 55 lakh on Visakhapatnam Co-operative Bank Ltd for violation of directions related to asset classification.
The RBI has imposed the penalty through an order dated August 25, 2022. The penalty has been imposed for "non-adherence/violation of directions issued under (i) Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and (ii) Finance for Housing Schemes-UCBs."
This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 (AACS), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI, the central bank said in a statement.
"This action is based on deficiencies 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," the RBI said.
The inspection report of the bank based on its financial position as on March 31, 2020, revealed inter alia, violation/non-compliance with directions issued under Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and Finance for Housing Schemes-UCBs.
Based on the same a Notice was issued to the bank advising it to show cause as to why a penalty should not be imposed for non-compliance with the directions.
After considering the bank's reply and oral submissions during the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty, the RBI said. (ANI)