Pune: RBI Imposes Rs 4 Lakh Penalty on Annasaheb Magar Sahakari Bank for Regulatory Non-Compliance
Pune, 13th October 2023: The Reserve Bank of India (RBI) has levied a monetary penalty of ₹4 lakh on Annasaheb Magar Sahakari Bank Ltd., located in Pune, Maharashtra. The penalty, dated September 15, 2023, has been imposed for the bank’s failure to comply with specific RBI directions, including ‘Know Your Customer (KYC) Direction, 2016,’ ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks,’ and ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs.’
The action is rooted in the bank’s deficiencies in regulatory compliance and does not reflect on the validity of any transactions or agreements the bank has with its customers. The penalty was imposed under the powers granted to RBI by Section 47 A (1) (c), read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.
The penalty follows a statutory inspection conducted by RBI, which assessed the bank’s financial position as of March 31, 2022. The inspection revealed several areas of non-compliance:
The bank had not conducted periodic reviews of risk categorization of accounts.
It had imposed fixed penal charges for shortfalls in maintaining minimum balances in savings accounts, rather than charges proportionate to the extent of the shortfall.
The bank had not adhered to prudential norms concerning income recognition, asset classification, and provisioning.
A notice was subsequently issued to the bank, asking it to show cause for its failure to comply with these directions.
After evaluating the bank’s written response and oral submissions during a personal hearing, RBI concluded that the charges of non-compliance were substantiated. This led to the imposition of the ₹4 lakh monetary penalty.
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