Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
12 Feb 2024
Case Brief
By an order dated February 08, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on Shillong Co-operative Urban Bank Limited, Meghalaya. The penalty was for non-compliance with RBI’s Know Your Customer (KYC) Directions, 2016, after inspection revealed deficiencies including failure to put in place a system for risk categorisation of accounts and failure to undertake periodic KYC updation of customer accounts. RBI stated that the action was based on regulatory compliance deficiencies and did 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 its inspection found that the bank had not put in place a system of risk categorisation of accounts and had failed to carry out periodic updation of KYC for customer accounts, in breach of the RBI’s Know Your Customer (KYC) Directions, 2016.
Operating Impact
The bank must bear the monetary penalty and address the identified KYC control gaps, particularly risk categorisation and periodic customer KYC updation. The action does not by itself impose a business restriction, but it signals ongoing supervisory expectations for stronger AML/KYC compliance.
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
- 8 Feb 2024
- Effective From
- 8 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank