Recorded RBI impact
Fine: Rs 6.00 L
Monetary penalty · Fresh imposition
Published by RBI
2 Jan 2023
Case Brief
By an order dated December 28, 2022, RBI imposed a monetary penalty of Rs 6.00 lakh on Sharad Sahakari Bank Ltd., Pune for non-compliance with RBI directions on KYC and interest rate on deposits. RBI said its inspection, based on the bank’s position as of March 31, 2021, found that the bank had not implemented a system for periodic KYC updation and had failed to pay applicable interest on balances in current accounts of deceased individual depositors / sole proprietorship concerns when settling claims. The penalty was levied under the Banking Regulation Act after considering the bank’s reply and oral submissions.
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 non-compliance with RBI directions on ‘Know Your Customers’ and ‘Interest Rate on Deposits’. The inspection noted that the bank had failed to put in place a system for periodic updation of KYC of accounts and had not paid applicable interest on balance amounts lying in current accounts of deceased individual depositors / sole proprietorship concerns while making payments to claimants.
Operating Impact
The bank must absorb the penalty and address the compliance gaps identified by RBI, especially periodic KYC updates and proper interest treatment on eligible deposit balances. The order does not restrict operations, but it signals supervisory expectations for stronger customer-compliance controls and deposit-account handling going forward.
Regulatory Basis
- section 47 A (1) (c)
- sections 46 (4) (i)
- sections 56 of Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 6.00 L
- Order Date
- 28 Dec 2022
- Effective From
- 28 Dec 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank