RBI imposes monetary penalty on Bassein Catholic Co-operative Bank Limited

Case Brief

RBI, by order dated March 28, 2024, imposed a monetary penalty of Rs 61,60,000 on Bassein Catholic Co-operative Bank Ltd. The action was taken after a statutory inspection and subsequent show-cause proceedings, where RBI found sustained non-compliance with directions on fraud monitoring and reporting, KYC, maintenance of deposit accounts, and management of advances. The bank was found to have reported frauds with delay, not carried out periodic review of risk categorisation of accounts during FY 2021-22, levied penal charges for non-maintenance of minimum balances in dormant/inoperative savings and current deposit accounts, and restructured credit facilities without establishing financial viability and reasonable certainty of repayment. RBI stated that the penalty was imposed under the Banking Regulation Act, 1949.