Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty on Bally Cooperative Bank Ltd., Howrah, West Bengal, by order dated August 07, 2023. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 for non-compliance with certain provisions of the RBI – Know Your Customer (KYC) Direction, 2016. RBI’s inspection found that the bank had failed to put in place a system for periodic review of risk categorisation of accounts. After issuing a show-cause notice and considering the bank’s reply, additional submissions, and oral hearing, RBI concluded that the non-compliance was substantiated and warranted the penalty.