Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
14 Feb 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1 lakh on Jila Sahakari Kendriya Bank Maryadit, Shivpuri (M.P.) for contravention of the Banking Regulation Act, 1949 and RBI directions on KYC. RBI said the bank delayed submission of statutory/OSS returns to RBI and NABARD and did not have a system to generate alerts or monitor suspicious transactions. The action was taken after inspection-based findings, issuance of a show-cause notice, and consideration of the bank's reply.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after an inspection revealed contraventions/non-compliance with the Act and RBI directions on Know Your Customer (KYC). The deficiencies included delay in submission of statutory/OSS returns to RBI and NABARD, and absence of a system to generate alerts and monitor suspicious transactions.
Operating Impact
The bank must absorb the monetary penalty, while the underlying compliance lapses highlighted by RBI signal the need to strengthen regulatory reporting controls and transaction-monitoring/KYC systems. No customer-facing operational restriction was imposed in this release.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949
- Banking Regulation Act, 1949
- directions issued by the Reserve Bank of India (RBI) on Know Your Customer (KYC)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 11 Feb 2022
- Effective From
- 11 Feb 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank