Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
24 Aug 2015
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Krishna Mercantile Co-operative Bank Ltd., Bhopal under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty followed a show-cause process and was based on RBI’s finding that the bank had violated its directives/guidelines on implementation of Know Your Customer (KYC) and Anti Money Laundering (AML) norms.
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 concluding that the bank had violated RBI directives/guidelines on implementation of KYC/AML norms. The bank had submitted a written reply to the show-cause notice, but RBI found the violations substantiated and warranting penalty.
Operating Impact
The bank must absorb the financial penalty and remain compliant with RBI’s KYC/AML requirements going forward. The release does not mention any operational restriction, but it signals continued supervisory scrutiny over the bank’s customer due diligence and AML controls.
Regulatory Basis
- Section 47A (1)(b)
- section 46(4) of Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank