Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty on Shri Kanyaka Nagari Sahakari Bank Ltd., Chandrapur, Maharashtra, by order dated December 05, 2022. The action was taken for contravention of and non-compliance with RBI directions issued to urban co-operative banks on Know Your Customer (KYC). RBI said inspection findings revealed deficiencies including no system for periodic review of risk categorisation of accounts, no system for periodic updation of customer KYC, and no robust software to identify and monitor suspicious transactions. After issuing a show-cause notice and considering the bank's replies and oral submissions, RBI concluded the charges were substantiated and warranted penalty under the Banking Regulation Act, 1949.