Recorded RBI impact
Fine: Rs 4.20 L
Monetary penalty · Fresh imposition
Published by RBI
14 Aug 2025
Case Brief
By an order dated August 12, 2025, RBI imposed a monetary penalty of ₹4.20 lakh on Maharashtra Gramin Bank, Aurangabad. The penalty was for non-compliance with NABARD directions on submission of OSS/FMS returns and RBI directions on KYC, after supervisory findings showed delayed reporting of certain frauds and failure to establish a six-monthly periodic review system for risk categorisation of accounts. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act for non-compliance with NABARD directions on ‘Offsite Surveillance System – Revision of Due dates for Submission of OSS/FMS Returns’ and RBI directions on ‘Know Your Customer (KYC)’. RBI found that the bank had delayed reporting certain frauds to NABARD and had not put in place a system for periodic review of risk categorisation of accounts at least once every six months.
Operating Impact
The bank must absorb the penalty and address the compliance gaps identified by RBI and NABARD, especially around fraud reporting and KYC risk review processes. The action does not itself impose an operational restriction on customers, but it signals supervisory concern and may support further regulatory action if lapses persist.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 51(1) of the Banking Regulation Act
Action Facts
- Primary Impact
- Fine: Rs 4.20 L
- Order Date
- 12 Aug 2025
- Effective From
- 12 Aug 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank