Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
20 Feb 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty on Jila Sahakari Kendriya Bank Maryadit, Tikamgarh (Madhya Pradesh) by order dated February 14, 2023. RBI found that the bank had contravened / not complied with its KYC directions, specifically by failing to complete risk categorisation of customers, based on inspection findings for the bank's financial position as on March 31, 2021. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
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. The inspection report for the bank's financial position as on March 31, 2021 found that it had not completed risk categorisation of customers, amounting to contravention / non-compliance with RBI's KYC directions. After considering the bank's reply, oral submissions, and additional submissions, RBI held the charge substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and strengthen KYC compliance controls, especially customer risk categorisation. The order does not invalidate any customer transaction, but it signals supervisory concern over compliance processes.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 14 Feb 2023
- Effective From
- 14 Feb 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank