Reserve Bank of India imposes monetary penalty on Nagar Urban Co-operative Bank Ltd., Ahmednagar

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹40 lakh on Nagar Urban Co-operative Bank Ltd., Ahmednagar by order dated May 27, 2020. The penalty was issued under the Banking Regulation Act, 1949 after a statutory inspection found non-compliance with RBI directions on Income Recognition and Asset Classification (IRAC) norms, Management of Advances and Exposure Norms, and Statutory/Other Restrictions, along with non-adherence to the bank's bye-laws regarding admission of a co-operative society as a member. RBI said the penalty was based on deficiencies in regulatory compliance and not intended to pronounce on the validity of any transaction or agreement with customers.