RBI imposes Rs 49 lakh fine on Bassein Catholic Co-op Bank, Vasai

RBI imposes Rs 49 lakh fine on Bassein Catholic Co-op Bank, Vasai

The Reserve Bank of India announced on Monday that it has fined Bassein Catholic Co-operative Bank, Vasai, Rs 49 lakh for failing to follow prudential guidelines. The RBI said in a statement that the penalty was levied for failing to follow its instructions on ‘Income Recognition, Asset Classification, Provisioning, and Other Related Matters’ (IRAC norms).

The central bank had conducted the statutory inspection of Bassein Catholic Co-operative Bank with reference to its financial position as on March 31, 2019.

According to the statement, in non-compliance with IRAC norms, the bank in certain instances had upgraded/regularised loan accounts of borrowers without recovering overdue amounts and had not classified existing non-performing loan accounts of borrowers as NPAs on restructuring.

A show cause notice was issued to the lender.

“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI came to conclusion that the charge of non-compliance…was substantiated and warranted imposition of monetary penalty,” it said.

The central bank, however, said the penalties are based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.

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