In a recent move underscoring its commitment to stringent regulatory oversight, the Reserve Bank of India (RBI) has imposed a monetary penalty on The Prakasam District Co-operative Central Bank Ltd, located in Ongole, Andhra Pradesh. This decision, dated June 05, 2024, comes as a consequence of the bank’s non-compliance with specific directions issued by the National Bank for Agriculture and Rural Development (NABARD) concerning the reporting and monitoring of frauds. The bank was fined ₹50,000 after a statutory inspection by NABARD revealed lapses in adherence to the mandated guidelines. Despite the bank’s efforts to address the issue through responses to a show-cause notice and oral submissions during a personal hearing, RBI deemed the penalty necessary due to the sustained charge of delayed reporting of fraud. This regulatory action highlights RBI’s ongoing vigilance in enforcing compliance, ensuring that financial institutions adhere to the highest standards to maintain system integrity and protect stakeholder interests.
Press Release
RBI imposes monetary penalty on The Prakasam District Co-operative Central Bank Ltd, Ongole, Andhra Pradesh
Date: 10/06/2024
The Reserve Bank of India (RBI) has, by an order dated June 05, 2024, imposed a monetary penalty of ₹50,000/- (Rupees Fifty thousand only) on The Prakasam District Co-operative Central Bank Ltd, Ongole, Andhra Pradesh (the bank) for non-compliance with the directions issued by the National Bank for Agriculture and Rural Development (NABARD) on ‘Frauds – Guidelines for Classification, Reporting and Monitoring’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4) (i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with NABARD directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said direction. After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of delay in reporting of fraud to NABARD was sustained, warranting imposition of monetary penalty.
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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
(Puneet Pancholy)
Chief General Manager
Press Release: 2024-2025/475
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