Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
25 Jul 2024
Case Brief
By an order dated July 22, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on Jharkhand State Co-operative Bank Ltd, Ranchi. The penalty was issued for non-compliance with RBI directions on Know Your Customer (KYC) norms, specifically the bank’s failure to maintain a system for periodic review of risk categorisation of accounts. RBI acted under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank’s submissions and hearing.
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, 1949, after supervisory findings showed non-compliance with RBI directions on Know Your Customer (KYC) norms. In particular, the bank’s failure to put in place a system for periodic review of the risk categorisation of accounts was sustained after consideration of its reply, oral submissions, and additional submissions.
Operating Impact
The bank must absorb the penalty, and the action serves as a regulatory finding of KYC compliance deficiency. The release states the penalty is without prejudice to any other action RBI may initiate, so further supervisory or enforcement action remains possible.
Regulatory Basis
- section 47A(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
- 22 Jul 2024
- Effective From
- 22 Jul 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank