Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹6.00 lakh on The Nakodar Hindu Urban Cooperative Bank Ltd., Nakodar, by order dated February 03, 2024. RBI said the penalty was for non-compliance with directions on Income Recognition, Asset Classification, Provisioning and Other Related Matters (IRAC Norms) and specific directions issued under the Supervisory Action Framework (SAF). Following its statutory inspection and review of the inspection and risk assessment materials, RBI found that the bank had failed to adhere to IRAC norms and had also paid dividend, sanctioned/renewed loans beyond the applicable regulatory limit for single-borrower exposure, exceeded the prescribed capital expenditure limit, and incurred operating expenditure by granting gifts. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the violations warranted monetary penalty under the Banking Regulation Act, 1949.
Action Snapshot
- Primary Impact
- Fine: Rs 6.00 L
- Entity Type
- Co-operative bank
- Location