RBI imposes monetary penalty on Mizoram Rural Bank

Case Brief

RBI imposed a monetary penalty of Rs 5,00,000 on Mizoram Rural Bank by order dated May 10, 2023. The penalty was levied for contravention of RBI directions relating to prudential norms, provisioning, asset classification, exposure limits, and IRAC/NPA norms. RBI said its examination of the NABARD statutory inspection for the bank's position as on March 31, 2022 showed that the bank had failed to classify certain loan accounts as non-performing in accordance with the applicable norms. After considering the bank's response, additional submissions, and oral submissions at personal hearing, RBI held that the charge was substantiated and that monetary penalty was warranted under the Banking Regulation Act, 1949.