RBI imposes monetary penalty on Kakinada Co-operative Town Bank Ltd, Kakinada, East Godavari District, Andhra Pradesh (Revised)

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹10 lakh on Kakinada Co-operative Town Bank Ltd, Kakinada, East Godavari District, Andhra Pradesh. RBI said the bank had failed to adhere to directions on income recognition, asset classification, provisioning and other related matters applicable to UCBs, and had also failed to transfer eligible balances to the Depositor Education and Awareness Fund. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS), after RBI considered the bank's reply and oral submissions and found the non-compliance substantiated. RBI also clarified that the action was based on regulatory deficiencies and was not intended to pronounce on the validity of any transaction or agreement with customers.