Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
1 Feb 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty on Nashik Zilha Sarkari & Parishad Karmachari Sahakari Bank Niyamit, Nashik, Maharashtra, by order dated January 18, 2024. RBI said the bank had not put in place a system of periodic review of the risk categorization of its customers, which amounted to non-compliance with RBI's KYC directions. The penalty was levied under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after RBI considered the bank's reply and oral submissions and found the charge substantiated.
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 its statutory inspection found that the bank had failed to establish a system for periodic review of the risk categorization of its customers, contrary to RBI's KYC directions. RBI stated that the deficiency reflected regulatory non-compliance and, after considering the bank's reply and oral submissions, concluded that the charge was substantiated.
Operating Impact
The bank must absorb the monetary penalty and ensure its KYC controls are strengthened, especially periodic review of customer risk categorization. The action does not, by itself, impose an operating restriction on customers, but it signals continued regulatory scrutiny over compliance processes.
Regulatory Basis
- section 47A (1)(c) read with sections 46 (4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 18 Jan 2024
- Effective From
- 18 Jan 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank