RBI imposes monetary penalty on The Rajkot Commercial Co-operative Bank Ltd., Rajkot (Gujarat)

Case Brief

RBI, by order dated February 21, 2023, imposed a monetary penalty of ₹4.00 lakh on The Rajkot Commercial Co-operative Bank Ltd., Rajkot (Gujarat). The penalty was levied for contravention of RBI directions relating to prudential norms on income recognition, asset classification, provisioning and related matters; placement of deposits with other banks by primary (urban) co-operative banks; and classification and valuation of investments by banks. RBI said its inspection found that the bank had not identified NPAs on an ongoing basis, had breached prudential inter-bank gross exposure norms, breached prudential inter-bank counter-party limits, and breached the limit for investments included under the HTM category. After a show-cause notice, reply, and oral hearing, RBI concluded that the non-compliance was substantiated and warranted penalty under the Banking Regulation Act, 1949.