Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Dec 2023
Case Brief
By an order dated November 23, 2023, RBI imposed a monetary penalty of ₹1.00 lakh on Contai Co-operative Bank Ltd., Dist. Purba Medinipur, West Bengal. The penalty was imposed for non-compliance with the RBI's Know Your Customer (KYC) Directions, 2016, after inspection found that the bank had failed to put in place a system for periodic review of risk categorisation of accounts. RBI took the action under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank's reply and oral submissions.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after its inspection found that Contai Co-operative Bank Ltd. had not complied with the RBI's Know Your Customer (KYC) Directions, 2016. The specific deficiency noted was the failure to establish a system for periodic review of risk categorisation of accounts.
Operating Impact
The bank must absorb the monetary penalty and ensure compliance with KYC directions, especially periodic review of customer risk categorisation. There is no stated operational restriction on depositors or customers beyond the compliance lapse addressed by the penalty.
Regulatory Basis
- section 47 A (1) (c) read with sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 23 Nov 2023
- Effective From
- 23 Nov 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank