Money & Banking

RBI imposes ₹1.50-cr penalty on Corporation Bank

Our Bureau Mumbai | Updated on November 30, 2019 Published on November 30, 2019

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.50 crore on Corporation Bank for non-compliance with certain provisions of directions issued by it on prudential norms relating to income recognition, asset classification and provisioning pertaining to advances - divergence in NPA (non-performing asset) accounts and advances, among others.

The central bank also referred to non-compliance by the public sector bank with certain provisions of directions issued by it relating to prudential norms for classification, valuation and operation of investment portfolio by banks; framework to revitalise the distressed assets in the economy - rectification and restructuring; end use of funds - monitoring, discounting/rediscounting of bills by banks; and frauds classification and reporting by commercial banks and select FIs.

The RBI, in a statement, said statutory inspection of the Bank with reference to its financial position as on March 31, 2017 and the Risk Assessment Report (RAR) revealed non-compliance with the above-mentioned directions issued by it.

“In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the directions.

“After considering the bank’s reply to the notice, oral submissions made in the personal hearing and examination of additional submissions, RBI concluded that the aforesaid charges of non-compliance with RBI directions warranted imposition of monetary penalty,” the statement said.

Corporation Bank, along with Andhra Bank, is set to be merged with Union Bank of India.

Published on November 30, 2019
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