RBl imposes monetary penalty on The Baghat Urban Co-operative Bank Limited, Solan, Himachal Pradesh

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹15.00 lakh on The Baghat Urban Co-operative Bank Limited, Solan, Himachal Pradesh. The penalty was imposed for non-compliance with RBI directions contained in the Master Circular on Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs and the Master Circular on Exposure Norms and Statutory / Other Restrictions – UCBs. RBI said its inspection revealed non-identification of NPAs, wrong asset classification, inadequate provisioning arising from such misclassification, and breaches of exposure norms for housing, real estate and commercial real estate (CRE). After a show-cause notice, the bank’s reply and oral submissions were considered, and RBI concluded the charges were substantiated and warranted the penalty under the Banking Regulation Act, 1949.