RBI Imposes Rs7 Lakh Penalty on Tripura Gramin Bank and Mizoram Rural Bank for Non-compliance

Moneylife Digital Team 16 May 2023

The Reserve Bank of India (RBI) has imposed penalties totalling Rs7 lakh on two cooperative banks for non-adherence with the directions issued by RBI on strengthening of prudential norms- provisioning, asset classification and exposure limit and regional rural banks- income recognition.

Tripura-based Tripura Gramin Bank and Mizoram Rural Bank are penalised by RBI for Rs2 lakh and Rs5 lakh, respectively.

In two separate releases, RBI says an inspection report submitted by National Bank for Agriculture and Rural Development (NABARD) for Tripura Gramin Bank and Mizoram Rural Bank revealed that both banks failed to classify certain loan accounts as non-performing in accordance with the income recognition, asset classification and provisioning (IRAC) norms.

"This penalty has been imposed in the exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the banking regulation act, 1949, taking into account the failure of the bank to adhere to the directions issued by RBI," the banking regulator says in a statement.

"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," it added.

RBI says, after considering the bank's replies and oral submissions made during the personal hearing, it concluded that the charge of non-compliance with its directions was substantiated and warranted imposition of monetary penalty.

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