RBI imposes monetary penalty on Arunachal Pradesh Rural Bank

Case Brief

By an order dated November 28, 2022, RBI imposed a monetary penalty of Rs 42.00 lakh on Arunachal Pradesh Rural Bank. The bank was found non-compliant with RBI directions on prudential norms, provisioning, asset classification, exposure limits, and IRAC/NPA classification, based on a NABARD statutory inspection and follow-up examination of the inspection reports and related correspondence. RBI noted that the bank failed to adhere to single-investment exposure limits and to classify certain term loans and credit facilities as non-performing assets, then proceeded under section 47A(1)(c) read with section 46(4)(i) and section 51(1) of the Banking Regulation Act, 1949 after issuing and considering a show-cause notice.