Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
23 Apr 2026
Case Brief
By an order dated April 21, 2026, RBI imposed a monetary penalty of ₹1 lakh on Hardoi Jilla Sahkari Bank Ltd., Uttar Pradesh. The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act after NABARD’s statutory inspection and subsequent supervisory review found non-compliance with RBI directions on Know Your Customer (KYC). The sustained charge was that the bank failed to put in place a system for periodic review of the risk categorisation of accounts, with a periodicity of at least once in six months. RBI noted that the action was based on regulatory deficiencies and did not pronounce on the validity of any transaction or agreement with customers.
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 after supervisory findings showed non-compliance with RBI directions on Know Your Customer (KYC). The sustained charge was that the bank had not put in place a system to periodically review the risk categorisation of accounts with a frequency of at least once every six months.
Operating Impact
The bank must absorb the financial penalty and strengthen its KYC control framework, especially periodic risk re-categorisation of customer accounts. The order does not itself impose a business restriction, but RBI may initiate further action if deficiencies persist.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 56 of the Banking Regulation Act
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 21 Apr 2026
- Effective From
- 21 Apr 2026
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank