RBI imposes Monetary Penalty on Krishna Mercantile Co-operative Bank Ltd., Bhopal
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Krishna Mercantile Co-operative Bank Ltd., Bhopal under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty followed a show-cause process and was based on RBI’s finding that the bank had violated its directives/guidelines on implementation of Know Your Customer (KYC) and Anti Money Laundering (AML) norms.
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after concluding that the bank had violated RBI directives/guidelines on implementation of KYC/AML norms. The bank had submitted a written reply to the show-cause notice, but RBI found the violations substantiated and warranting penalty.
Severity Assessment
A monetary penalty of ₹5.00 lakh falls in the lowest monetary band, and there is no operational restriction beyond the fine.
The bank must absorb the financial penalty and remain compliant with RBI’s KYC/AML requirements going forward. The release does not mention any operational restriction, but it signals continued supervisory scrutiny over the bank’s customer due diligence and AML controls.
Published as Krishna Mercantile Co-operative Bank Ltd., Bhopal
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