Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Feb 2017
Case Brief
The Reserve Bank of India levied a monetary penalty on Kaujalgi Urban Cooperative Credit Bank Ltd., Koujalgi, Karnataka under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its instructions/guidelines on the Depositor Education and Awareness Fund Scheme, 2014, and also breached KYC/AML directives. The bank was issued a show-cause notice, sought extension of time twice, but did not submit compliance or request a personal hearing; RBI therefore held the violations substantiated and imposed the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after finding that the bank had violated instructions/guidelines concerning the Depositor Education and Awareness Fund Scheme, 2014, and had also breached KYC/AML directives issued by RBI. The bank received a show-cause notice, sought extensions of time twice, but did not submit compliance or seek a personal hearing; RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must bear the ₹1 lakh penalty, but the release does not describe any operational restriction, suspension, or cancellation. The matter is limited to compliance lapses already identified by RBI, with no stated forward-looking restriction on business activities or customers.
Regulatory Basis
- Section 47 A (1) (b) read with Section 46 (4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank