RBI Cracks Down: Imposes ₹27.30 Lakh Penalty on ACRE for Management Fee Violations and ₹1.15 Lakh on Jilla Sahakari Bank

The Reserve Bank of India (RBI) has issued two separate enforcement orders penalizing Asset Care & Reconstruction Enterprise Limited (ACRE) and Jilla Sahakari Bank Ltd., Azamgarh (Uttar Pradesh) for statutory and regulatory non-compliance.

The penalties, totaling ₹28.45 lakh, highlight the central bank’s zero-tolerance stance toward improper revenue recognition among distressed asset managers and failures in grassroots credit reporting among co-operative lenders.

Order 1: ACRE Penalized ₹27.30 Lakh for Management Fee Lapses

In an order dated September 08, 2026 (Press Release: 2026-2027/1105), the RBI imposed a monetary penalty of ₹27.30 lakh (Rupees Twenty-Seven Lakh Thirty Thousand only) on leading Asset Reconstruction Company (ARC) Asset Care & Reconstruction Enterprise Limited.

The penalty was levied under Section 12 read with Section 30A(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

Following a statutory inspection conducted by the RBI based on the company's financial position as of March 31, 2025, the regulator established that:

• The company violated mandatory RBI directions on 'Income Recognition'.
• Specifically, ACRE breached regulatory requirements concerning the charging and accrual of management fees.

Under RBI guidelines for ARCs, management fees can only be charged or recognized based on the lower of the Net Asset Value (NAV) of Security Receipts (SRs) or acquisition cost, and cannot be booked ahead of actual cash realizations or if recovery ratings fall below prescribed thresholds.

Order 2: Jilla Sahakari Bank Fined ₹1.15 Lakh for Credit Bureau and CKYC Lapses

In a separate order dated September 09, 2026 (Press Release: 2026-2027/1090), the central bank imposed a penalty of ₹1.15 lakh (Rupees One Lakh and Fifteen Thousand only) on Jilla Sahakari Bank Ltd., Azamgarh, Uttar Pradesh.

The action followed a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) as of March 31, 2025.

The RBI sustained two specific operational violations:

1. Non-Reporting to Credit Bureaus: The bank failed to report borrower credit information to all Credit Information Companies (CICs), violating provisions under Section 25(1)(iii) of the Credit Information Companies (Regulation) Act, 2005.
2. CKYCR Delays: The bank failed to upload customer KYC records onto the Central KYC Records Registry (CKYCR) within the mandated timeframes, breaching Section 47A(1)(c) of the Banking Regulation Act, 1949.

DimensionOrder 1: ACRE Limited, Order 2: Jilla Sahakari Bank Ltd.