Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
7 Aug 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Shreeji Bhatia Cooperative Bank Ltd., Mumbai for non-compliance with specific directions issued under the Supervisory Action Framework and the RBI KYC Directions, 2016. RBI said the bank incurred capital expenditure without prior approval, contrary to SAF directions, and failed to conduct periodic review of the risk categorization of existing customers. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after the bank's reply to a show-cause notice was considered and the charges were found 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 a statutory inspection and review of related correspondence found that the bank had violated RBI's Supervisory Action Framework directions by incurring capital expenditure without prior approval and had not conducted periodic review of risk categorization of existing customers, breaching the KYC Directions, 2016.
Operating Impact
The bank must absorb the penalty and continue complying with RBI's SAF and KYC requirements. The action does not itself impose a business restriction, but it signals heightened supervisory scrutiny over capital expenditure approvals and ongoing customer risk categorization reviews.
Regulatory Basis
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
- Supervisory Action Framework (SAF)
- Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 3 Jul 2023
- Effective From
- 3 Jul 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank