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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.25 lakh on The Valsad Mahila Nagarik Sahakari Bank Ltd., Valsad, Gujarat for non-compliance with directions relating to Income Recognition, Asset Classification, Provisioning, KYC norms, and membership of Credit Information Companies (CICs), as well as maintenance of deposit accounts by Urban Co-operative Banks.
The statutory inspection conducted with reference to the bank’s financial position as on March 31, 2023, revealed several lapses:
Failure to classify certain loan accounts as non-performing assets in accordance with IRAC norms.
Non-submission of data, including historic data, to three Credit Information Companies (CICs) as of March 31, 2023.
Failure to carry out risk-based periodic KYC updates for customers within the prescribed timelines.
Non-classification of accounts as inoperative/dormant where no customer-induced transactions occurred for over two years.
RBI issued a show-cause notice to the bank, considered its responses, and conducted a personal hearing before concluding that the charges were substantiated, warranting the imposition of the penalty.
The action is based strictly on regulatory non-compliance and is without prejudice to any other action that RBI may initiate. It does not affect the validity of any transactions or agreements between the bank and its customers.
[RBI]