Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
26 Nov 2012
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on Bharathiya Sahakara Bank Niyamitha, Chamarajanagar, Karnataka. The penalty was issued under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after RBI found that the bank had violated its Know Your Customer (KYC) instructions. RBI had issued a show-cause notice, considered the bank’s written reply and personal submission, and concluded that the violation was substantiated.
Why RBI Acted
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) because Bharathiya Sahakara Bank Niyamitha violated RBI instructions on Know Your Customer (KYC) guidelines contained in Circular UBD.PCB.Cir.30/09.161.00/2004-05 dated December 15, 2004. A show-cause notice was issued, the bank replied in writing and made personal submissions, and RBI concluded the violation was substantiated and warranted penalty.
Operating Impact
The bank must absorb the penalty and comply more carefully with RBI’s KYC requirements going forward. The action does not describe any operational restriction, but it signals heightened compliance expectations for customer due diligence and record-keeping.
Regulatory Basis
- Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 15 Dec 2004
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank