The Rajasthan Urban Co-operative Bank Limited, Jaipur – Penalised

The Rajasthan Urban Co-operative Bank Limited, Jaipur with two branches at MI Road and Chandpol, has been imposed a monetary penalty of  Rs1.00 lakh (Rupees One Lakh only), by Reserve Bank of India.

The penalty was for violating the RBI directives/guidelines on individual and group exposure ceiling, IRAC norms and window-dressing.

The IRAC (Income Recognition, Asset Classification) norms are an important tool in RBI’s armory to arrive at the true position of a bank’s loan portfolio and also to minimize its deterioration.

Way back in 1991, the first guidelines on IRAC were noticed to Urban Co-operative Banks vide RBI Cir.No.UBD.No.I&L 51/J.1-90/91 dt.

Banks should classify their assets into the following broad groups, viz. –

(i)  Standard Assets

(ii)  Sub-standard Assets

(iii)  Doubtful Assets

(iv)  Loss Assets


Yes, like all industries, there is window-dressing in the banking industry too.

An interesting quote here:

Bigger the lie, greater is the probability of it being believed, Hitler’s trusted deputy, Goebbels, had famously stated.

Fudging of Deposits and Advances figures is the window-dressing variant of banking industry. This normal happens during the run-up to the performance appraisal cycle.


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