Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Aug 2015
Case Brief
The Reserve Bank of India penalized Dausa Urban Co-operative Bank Limited, Dausa under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found violations of its KYC/AML guidelines, including the absence of a system for risk categorization, fixing threshold limits, and putting in place software to generate alerts for identifying suspicious transactions. After a show cause notice, the bank’s reply, and a personal hearing, RBI concluded the breaches were substantiated and imposed a monetary penalty of ₹1 lakh.
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). The violations were in respect of Know Your Customer (KYC) / Anti Money Laundering (AML) requirements, specifically absence of a system for risk categorization, fixation of threshold limits, and appropriate software for generating alerts to identify suspicious transactions. RBI issued a show cause notice, considered the bank’s reply and personal hearing, and concluded the violations were substantiated.
Operating Impact
The bank must absorb the penalty and strengthen its KYC/AML controls, including risk categorization, threshold setting, and suspicious transaction monitoring. No broader operational restriction is described, but the bank remains exposed to compliance expectations and potential further action if deficiencies persist.
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
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank