Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
25 Oct 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on District Central Co-operative Bank Limited, Supaul, by order dated September 19, 2023. RBI said the bank had failed to comply with the Reserve Bank of India (Know Your Customer (KYC)) Direction, 2016, after a NABARD inspection found that it had not put in place a system for periodic review of risk categorisation of accounts. The penalty was imposed under Section 47-A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after NABARD’s statutory inspection found that the bank had not put in place a system for periodic review of the risk categorisation of accounts, amounting to non-compliance with the Reserve Bank of India (Know Your Customer (KYC)) Direction, 2016. The penalty was levied under Section 47-A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and continue to ensure compliance with RBI KYC requirements, especially periodic review of account risk categorisation. The release does not impose a business restriction, but it signals continued regulatory scrutiny of the bank’s KYC controls and compliance framework.
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
- 19 Sept 2023
- Effective From
- 19 Sept 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank