THE Reserve Bank of India (RBI) on Tuesday imposed a penalty of Rs 1 crore on Pune-based Janata Sahakari Bank for violating norms on income recognition, asset classification, management of advances and exposure.

In a statement issues on Wednesday, Janata Sahakari Bank stated that there was difference in understanding the non-performing asset (NPA) norms in the audit year ended March 2018.



The RBI had perceived the gross bad loans at 13.98% in the FY2018, while the bank had reported it to be 6.92%, Janata Sahakari Bank said, adding that it had followed the asset classification norm “fully” in the following year ended March 2019.



Further, the bank said some of the accounts flagged in that year by the RBI because Janata Sahakari Bank allegedly extended unsecured loan was also closed in full in the very subsequent month (April 2018).



“This action is based on 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…A notice was issued to the bank advising it to show cause as to why monetary penalty should not be imposed for non-compliance with the aforesaid directions.

After considering the bank’s reply and oral submissions made during the personal hearing, RBI came to the conclusion that the charges regarding non-compliance with the directions on income recognition and asset classification (IRAC) norms, management of advances and exposure norms and statutory/ other restrictions, warranted imposition of monetary penalty,” the RBI said in a statement on Tuesday.

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