Recorded RBI impact
Fine: Rs 96.4 L
Monetary penalty · Fresh imposition
Published by RBI
14 Jun 2024
Case Brief
By order dated June 10, 2024, RBI imposed a monetary penalty of Rs 96.40 lakh on Sonali Bank PLC. The penalty was levied under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949 and Section 25(1)(iii) read with Section 23(4) of the CIC (Regulation) Act, 2005, following supervisory findings from the bank’s statutory inspection and IT examination. RBI sustained charges that the bank failed to maintain periodic review of risk categorisation of accounts, lacked robust alert software for transactions inconsistent with risk categorisation and customer profiles, did not implement certain SWIFT-related operational controls on time, and did not become a member of all CICs within the stipulated timeline.
Why RBI Acted
RBI imposed a monetary penalty on Sonali Bank PLC for contravention of Section 15(1) of the Credit Information Companies (Regulation) Act, 2005 and non-compliance with RBI directions on ‘Membership of Credit Information Companies (CICs)’, the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’, and directions on time-bound implementation and strengthening of SWIFT-related operational controls. RBI found that the bank had not put in place periodic review of risk categorisation of accounts, had not used robust software to flag transactions inconsistent with customer risk categorisation and updated profiles, had not implemented certain SWIFT-related controls within stipulated timelines, and had not become a member of all CICs within the stipulated timeline.
Operating Impact
The bank must absorb the monetary penalty and remain exposed to any further action RBI may initiate separately. The order does not validate or invalidate customer transactions, but it signals compliance deficiencies in KYC, CIC membership, and SWIFT controls that RBI expects the bank to rectify going forward.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949
- Section 25(1)(iii) read with Section 23(4) of the CIC (R) Act
- Section 15(1) of the Credit Information Companies (Regulation) Act, 2005
Action Facts
- Primary Impact
- Fine: Rs 96.4 L
- Order Date
- 10 Jun 2024
- Effective From
- 10 Jun 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank