Recorded RBI impact
Fine: Rs 20.0 L
Monetary penalty · Fresh imposition
Published by RBI
9 Jun 2015
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹20.00 lakh on Integral Urban Co-operative Bank Limited, Jaipur under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank had violated KYC/AML guidelines/directives, including failure to generate CTR/STR alert reports, lack of a risk-categorization and threshold-limit system, non-reporting of cash transactions to FIU-IND (including director-related accounts), and inadequate monitoring of cash transactions. After a show-cause notice, written reply, and personal hearing, RBI concluded the violations were substantiated and imposed the penalty.
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) because the bank violated KYC/AML guidelines/directives. The cited lapses included absence of a facility to generate alert reports for CTR/STR, no system for risk categorization and fixation of threshold limits, non-reporting of cash transactions to FIU-IND including director-related accounts, and non-monitoring of cash transactions. RBI issued a show-cause notice, considered the bank's written reply and personal hearing, and concluded that the violations were substantiated.
Operating Impact
The bank must bear the ₹20 lakh penalty; the release does not describe any additional operational restriction. The forward-looking impact is primarily financial and reputational, while the underlying KYC/AML and transaction-monitoring deficiencies remain the compliance issue highlighted by RBI.
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 20.0 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank