Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
26 Jun 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.50 lakh on Solapur Siddheshwar Sahakari Bank Limited, Solapur (Maharashtra), for contravention / non-adherence to RBI directions on Know Your Customer (KYC). RBI said the bank’s risk assessment report showed that it had no system for periodic review of risk categorisation of accounts, and after considering the bank’s replies and submissions, concluded that the violation was substantiated and merited penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after finding that Solapur Siddheshwar Sahakari Bank Limited had contravened / not complied with RBI directions on Know Your Customer (KYC). The risk assessment report for the bank (based on its position as on March 31, 2022) showed that it had no system of periodic review of risk categorisation of accounts, which RBI concluded substantiated the non-compliance and warranted penalty.
Operating Impact
The bank must absorb the penalty and address the KYC control gap identified by RBI, especially the lack of periodic review of account risk categorisation. The action does not itself impose an operational restriction, but it signals continued regulatory scrutiny over the bank’s KYC/AML compliance framework.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.50 L
- Order Date
- 22 Jun 2023
- Effective From
- 22 Jun 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank