RBI in action
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹50,000 on The Prakasam District Co-operative Central Bank Ltd in Ongole, Andhra Pradesh, for failing to comply with directions issued by the National Bank for Agriculture and Rural Development (NABARD) regarding fraud classification, reporting, and monitoring. The penalty was enforced through an order dated June 5, 2024, under the provisions of section 47A(1)(c) in conjunction with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank, conducted by NABARD based on its financial position as of March 31, 2023, revealed non-compliance with NABARD’s directives. Consequently, a notice was issued to the bank to explain why a penalty should not be imposed. After reviewing the bank’s response and oral submissions during a personal hearing, the RBI determined that the bank had indeed delayed reporting fraud to NABARD, justifying the monetary penalty.
This action addresses regulatory compliance deficiencies and does not affect the validity of any transactions or agreements between the bank and its customers. Additionally, the penalty is imposed without prejudice to any further actions that RBI may take against the bank.
