Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
12 Dec 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Eastern & North-East Frontier Railway Co-operative Bank Ltd., Kolkata, West Bengal, by an order dated December 07, 2022. RBI said the bank contravened specific directions issued under the Supervisory Action Framework (SAF) and certain provisions of the RBI (Know Your Customer (KYC)) Direction, 2016. The inspection report found deficiencies including failure to comply with SAF directions and RBI directions on periodic review of risk categorisation of accounts. After a show-cause notice, RBI considered the bank’s reply and hearing submissions and concluded that the non-compliance was substantiated, warranting the penalty.
Why RBI Acted
RBI imposed a monetary penalty after an inspection found that the bank had not adhered to specific directions issued under the Supervisory Action Framework (SAF) and to provisions of the RBI (Know Your Customer (KYC)) Direction, 2016. The non-compliance related to RBI directions on the periodic review of risk categorisation of accounts. RBI issued a show-cause notice, considered the bank’s reply and hearing submissions, and concluded that the charges were substantiated.
Operating Impact
The bank must bear the monetary penalty and address the compliance weaknesses identified by RBI, especially around adherence to supervisory directions and KYC risk categorisation processes. The action does not describe a business restriction, but it signals continued regulatory scrutiny of the bank’s compliance framework.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 7 Dec 2022
- Effective From
- 7 Dec 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank