Banking and Credit
The Reserve Bank of India, exercising powers under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, imposed a monetary penalty of ₹1 lakh (Rupees One lakh only) on Vikas Souharda Co-operative Bank Limited, Hosapete, Karnataka. The penalty arises from the bank’s non‑compliance with RBI directions concerning Income Recognition, Asset Classification, Provisioning and other related matters applicable to Urban Co-operative Banks (UCBs).
A statutory inspection of the bank’s financial position as on 31 March 2025 was conducted. Following supervisory findings of non‑compliance, the RBI issued a notice to the bank requiring it to show cause why the penalty should not be imposed. After reviewing the bank’s written reply and oral submissions made during a personal hearing, the RBI concluded that the bank had failed to classify certain loan accounts as non‑performing assets (NPAs). This breach warranted the imposition of the monetary penalty.
The RBI clarified that the penalty is imposed solely for regulatory deficiencies and does not comment on the validity of any transaction or agreement between the bank and its customers. The action is also without prejudice to any further action that the RBI may initiate against the bank.
Regulatory and Policy Measures
The penalty underscores the RBI’s commitment to enforce compliance with its regulatory framework for urban co‑operative banks, particularly in the areas of income recognition, asset classification, and provisioning. The RBI’s enforcement action is intended to ensure that banks adhere to prescribed norms, thereby safeguarding the stability and integrity of the banking sector.
The press release is signed by the Chief General Manager, Brij Raj.