Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
10 Sept 2013
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2 lakh on Jamia Cooperative Bank Ltd, 2/9, Surya Complex, Sarai Jullena, Okhla Road, New Delhi. RBI said the bank violated KYC and AML norms, including customer identification procedures, identifying the natural persons behind entities, enhanced due diligence, and risk categorisation. It also found non-compliance with IRAC norms through transfer of funds between accounts, involvement of directors in day-to-day affairs, and diversion of loan funds through borrower accounts to firms in which directors had an interest. The penalty was imposed under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty of Rs 2 lakh on Jamia Cooperative Bank Ltd, New Delhi. The bank was found to have violated KYC and AML requirements relating to customer identification, identification of beneficial/natural persons behind entities, enhanced due diligence, and risk categorisation; non-compliance with IRAC norms through transfer of funds from one account to another; involvement of directors in the bank's day-to-day affairs; and diversion of funds from loan accounts through borrowers' current/savings accounts to firms in which directors had an interest. The action was taken after a show-cause notice and consideration of the bank's reply, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 as applicable to co-operative societies.
Operating Impact
The bank must absorb the penalty and address the cited compliance weaknesses. The action does not itself impose an operational restriction, but it signals RBI's findings on governance, lending, and AML controls that may invite closer supervisory scrutiny.
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 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank