RBI imposes Rs 56 lakh penalty on The Nainital Bank

The Reserve Bank of India (RBI) on Friday said it has imposed a penalty of Rs 56 lakh on The Nainital Bank, Uttarakhand, for non-compliance with certain norms related to classification of non-performing assets and frauds. The apex bank had conducted a Statutory Inspection for Supervisory Evaluation (ISE) of the lender with reference to its financial position as on March 31, 2019 and found non-compliance with certain directions.

There was a divergence between bank’s reported NPAs and NPAs assessed during the inspection on account of failure to classify certain borrower accounts as NPA. There was also a failure to disclose material divergences relating to asset classification and provisioning identified by the RBI, despite exceeding the defined threshold, in the Notes to Accounts, the RBI said in a statement.

There was also a failure on the part of the bank to report frauds as per the RBI directions.

The RBI, however, said the action against The Nainital Bank is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close