Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Jun 2023
Case Brief
By an order dated May 29, 2023, RBI imposed a monetary penalty of ₹1.00 lakh on Shri Laxmi Sahakari Bank Ltd., Mhaisal, Maharashtra. The penalty was for non-compliance with RBI's KYC directions, specifically the bank's failure to put in place a system for periodic review of risk categorisation of accounts. RBI said the action was based on deficiencies in regulatory compliance and was imposed after a statutory inspection, issuance of a show-cause notice, and consideration of the bank's reply under the Banking Regulation Act, 1949.
Why RBI Acted
RBI found, on the basis of its statutory inspection and related review, that the bank had not implemented a system for periodic review of risk categorisation of accounts, amounting to non-compliance with RBI's KYC directions. After issuing a show-cause notice and considering the bank's reply, RBI concluded the contravention was substantiated and imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty; the order does not describe a new operational restriction or licence action. The matter highlights a compliance failure in KYC processes, but no depositor or borrower limit is imposed by this release.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and Section 56 of Banking Regulation Act, 1949 (BR Act)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 29 May 2023
- Effective From
- 29 May 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank