Recorded RBI impact
Fine: Rs 10,000
Monetary penalty · Fresh imposition
Published by RBI
14 Feb 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 10,000 on Jila Sahakari Kendriya Bank Maryadit, Gwalior (M.P.) for contravention of RBI's KYC directions. RBI said an inspection report based on the bank's financial position as on March 31, 2019 found that the bank had no mechanism to identify suspicious transactions. After issuing a show-cause notice and considering the bank's replies and oral submissions, RBI concluded the violation was substantiated and levied the penalty under the Banking Regulation Act, 1949.
Why RBI Acted
Based on an inspection report for the bank's financial position as on March 31, 2019, RBI found that the bank had no mechanism in place to identify suspicious transactions, amounting to contravention/non-compliance with RBI's KYC directions. After a show-cause notice, replies, and oral submissions, RBI concluded the charge was substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the penalty and ensure stronger KYC/AML controls, especially mechanisms to detect suspicious transactions. The action does not impose a business restriction, but it signals regulatory scrutiny of the bank's compliance framework.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 10,000
- Order Date
- 11 Feb 2022
- Effective From
- 11 Feb 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank