Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
6 Jun 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty on Jila Sahakari Kendriya Bank Maryadit, Morena (M.P.) for contravention of and non-compliance with RBI's Know Your Customer (KYC) directions. An inspection for the bank's financial position as on March 31, 2020 found that it had no system in place to identify suspicious transactions. After issuing a show-cause notice and considering the bank's replies and submissions, RBI held the charge substantiated and imposed the penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act.
Why RBI Acted
An RBI inspection based on the bank's financial position as on March 31, 2020 found that the bank had no system in place to identify suspicious transactions, amounting to contravention/non-compliance with RBI's Know Your Customer (KYC) directions. After a show-cause notice, the bank's replies and oral/additional submissions were considered, and RBI concluded the charge was substantiated, warranting a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act.
Operating Impact
The bank must absorb the monetary penalty and ensure KYC/AML controls, including systems to identify suspicious transactions, are strengthened. The order does not state any customer-facing operational restriction beyond the fine.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)(i)
- Section 56
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 2 Jun 2022
- Effective From
- 2 Jun 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank