RBI imposes monetary penalty on Panihati Co-operative Bank Ltd
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2,50,000 on Panihati Co-operative Bank Ltd. by order dated June 20, 2023. RBI said the bank had not adhered to directions on exposure norms and KYC requirements, based on an inspection that found violations in prudential inter-bank exposure limits and in producing KYC documents for several accounts. The penalty was levied under the Banking Regulation Act, 1949 after considering the bank's reply and submissions.
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 after an inspection found the bank had contravened RBI directions on 'Exposure Norms and Statutory / Other Restrictions – UCBs' and the 'Know Your Customer (KYC) Direction, 2016'. The inspection noted failures in prudential inter-bank exposure at both gross and counterparty levels and in producing KYC documents for several accounts.
Severity Assessment
This is a monetary penalty of Rs 2.5 lakh, which falls in the lowest monetary band and has no broader structural restriction.
The bank must bear the monetary penalty, but the release does not indicate any operational restriction or suspension. The action signals ongoing compliance expectations around exposure limits and KYC documentation for the bank's customers and counterparties.
Published as Panihati Co-operative Bank Ltd.
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