Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
7 Dec 2023
Case Brief
By an order dated November 17, 2023, RBI imposed a monetary penalty of ₹1.00 lakh on Patan Co-operative Bank Limited, Mumbai, Maharashtra. The penalty was for non-compliance with RBI’s KYC Directions, 2016, specifically the bank’s failure to carry out periodic review of risk categorisation of accounts. RBI said the action was based on deficiencies in regulatory compliance and does not pronounce on the validity of any transaction or agreement entered into by the bank with its customers.
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 an inspection found that the bank had not carried out periodic review of the risk categorisation of accounts, in breach of RBI’s Master Direction on Know Your Customer (KYC), 2016. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the non-compliance was substantiated.
Operating Impact
The bank must bear the penalty and address the underlying KYC control deficiency, especially periodic review of account risk categorisation. The order does not itself restrict operations or customer transactions, but it signals heightened supervisory scrutiny and expectations for stronger ongoing compliance.
Regulatory Basis
- Section 47 A (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
- 17 Nov 2023
- Effective From
- 17 Nov 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank