Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
10 Aug 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Mangal Co-operative Bank Limited, Mumbai, for non-compliance with RBI directions on Maintenance of Deposit Accounts and Know Your Customer (KYC). RBI said its inspection found the bank had not conducted annual reviews of inoperative accounts and had not periodically reviewed the risk categorisation of existing customers. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after the bank’s reply and oral submissions were considered.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after a statutory inspection found that Mangal Co-operative Bank Limited had failed to comply with RBI directions on ‘Maintenance of Deposit Accounts’ and ‘Know Your Customer (KYC)’. The inspection noted that the bank had not conducted annual review of inoperative accounts and had not carried out periodic review of risk categorisation of existing customers. After considering the bank’s written reply and oral submissions, RBI concluded that the contraventions were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and strengthen its deposit-account monitoring and KYC controls going forward. The action does not indicate any restriction on operations, but it signals continued supervisory scrutiny over compliance processes affecting customers and account management.
Regulatory Basis
- section 47A(1)(c)
- sections 46(4)(i)
- section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 3 Aug 2023
- Effective From
- 3 Aug 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank