Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
3 Sept 2021
Case Brief
RBI imposed a monetary penalty of ₹2.00 lakh on The Akola District Central Co-operative Bank Limited, Akola, Maharashtra, for non-compliance with provisions of the RBI – Know Your Customer (KYC) Direction, 2016. The inspection found that the bank had failed to put in place a robust system for generating alerts as part of effective identification and monitoring of suspicious transactions. RBI issued a show-cause notice, considered the bank's replies and oral submissions, and concluded that the contravention was substantiated, leading to the penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of 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 inspection found that the bank had not implemented a robust alert system as part of effective identification and monitoring of suspicious transactions, resulting in non-compliance with the RBI – Know Your Customer (KYC) Direction, 2016. The bank's replies and oral submissions were considered, but RBI held the charge substantiated and warranted penalty.
Operating Impact
The bank must bear the ₹2 lakh penalty and continue ensuring compliance with RBI KYC requirements, especially around alert generation and monitoring of suspicious transactions. The order does not itself alter customer transactions, but it signals ongoing supervisory scrutiny of the bank's AML/KYC controls.
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 2.00 L
- Order Date
- 3 Sept 2021
- Effective From
- 3 Sept 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank