RBI imposes penalty on Mizoram Rural Bank, Tripura Gramin Bank for violating norms

The Reserve Bank of India (RBI) has imposed monetary penalties on Mizoram Rural Bank and Tripura Gramin Bank for contravention of various norms.

In a press release, RBI said it has imposed, by an order dated May 10, 2023, a monetary penalty of Rs. 2 Lakh on Tripura Gramin Bank, Agartala, Tripura for contravention of/non-adherence with the directions issued by RBI on ‘Strengthening of Prudential Norms - Provisioning, Asset Classification and Exposure Limit’ and ‘Regional Rural Banks - Income Recognition, Asset Classification and Provisioning Norms - Non-Performing Assets (NPAs)’.
 
While the RBI has imposed, another monetary penalty of Rs 5 lakh on Mizoram Rural Bank for contravention of/ non-adherence with the directions issued by RBI on ‘Strengthening of Prudential Norms - Provisioning, Asset Classification and Exposure Limit’ and ‘Regional Rural Banks - Income Recognition, Asset Classification and Provisioning Norms - Non-Performing Assets (NPAs)’. 

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As per the press release of RBI, the penalties were imposed on both banks after they failed to categorize certain loan accounts as non-performing in line with the Income Recognition and Asset Classification (IRAC) norms.

“The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2022, and the examination of the Inspection Report revealed, inter alia, that the bank had failed to classify certain loan account as non-performing in accordance with the IRAC norms. 

Based on the same, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for non-compliance with the directions. After considering the bank’s reply to the notice, additional submissions made and oral submissions made by it during Personal Hearing, RBI came to the conclusion that the aforementioned charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty”, the press release added.