Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
24 Oct 2013
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on Siwan Central Co-operative Bank Ltd., Bihar. The penalty was levied under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after RBI found that the bank had violated Know Your Customers (KYC) norms and Anti Money Laundering (AML) guidelines. RBI had issued a show cause notice, and after reviewing the bank's written reply and personal submissions, concluded that the contraventions were substantiated and merited penalty.
Why RBI Acted
The Reserve Bank of India imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was issued a show cause notice, submitted a written reply, and made personal submissions. After considering the facts, RBI concluded that the violations relating to Know Your Customer (KYC) norms and Anti Money Laundering (AML) guidelines were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and remain compliant with KYC/AML requirements going forward. The action does not indicate a suspension or business restriction, but it signals continued regulatory scrutiny of the bank's compliance controls.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank