The Anand Mercantile Co-operative Bank Ltd., Anand, Gujarat

After a statutory inspection with reference to the bank's financial position as on March 31, 2024, RBI found that The Anand Mercantile Co-operative Bank Ltd., Anand, Gujarat had not complied with certain RBI directions relating to 'Guidelines for Managing Risk in Outsourcing of Financial Services by Co-operative Banks' and 'Know Your Customer (KYC)'. The sustained charges included outsourcing of the bank's core management function of internal audit and failure to carry out periodic review of risk categorisation of certain accounts at least once in six months. RBI imposed the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

The bank must absorb the monetary penalty and address the compliance gaps identified by RBI, especially around outsourcing controls and KYC risk categorisation reviews. The order does not itself impose a business restriction, but RBI has indicated that the penalty is without prejudice to any further action it may take.