Recorded RBI impact
Fine: Rs 25,000
Monetary penalty · Fresh imposition
Published by RBI
19 Sept 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹25,000 on Nagrik Sahakari Bank Maryadit, Vidisha (M.P.) by order dated September 16, 2022. The penalty was levied for contravention of RBI directions issued to urban co-operative banks on Know Your Customer (KYC), specifically for failure to carry out periodic updation of customer KYC. RBI said the action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after issuing a show-cause notice and considering the bank's replies and oral submissions.
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, after finding that Nagrik Sahakari Bank Maryadit had not complied with RBI directions on Know Your Customer (KYC). The Risk Assessment Report for the bank, based on its financial position as on March 31, 2021, showed that it had not carried out periodic KYC updation of its customers. A show-cause notice was issued, and after considering the bank's replies and oral submissions, RBI concluded that the non-compliance was substantiated and warranted penalty.
Operating Impact
The bank must bear the monetary penalty and address the KYC compliance gap identified by RBI. The action does not itself impose a business restriction, but it signals regulatory scrutiny of the bank’s customer due diligence and ongoing KYC maintenance obligations.
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 25,000
- Order Date
- 16 Sept 2022
- Effective From
- 16 Sept 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank