Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
14 Aug 2023
Case Brief
RBI imposed a monetary penalty on The Aska Co-operative Central Bank Ltd., Aska for non-compliance with certain provisions of the RBI (Know Your Customer (KYC)) Direction, 2016. Following NABARD's inspection as of March 31, 2022, RBI found that the bank had not put in place a system for periodic review of risk categorisation of accounts. After issuing a show-cause notice and considering the bank's submissions and personal hearing, RBI held the charge substantiated and levied a penalty of Rs 50,000 under the Banking Regulation Act, 1949.
Why RBI Acted
NABARD's statutory inspection of the bank, with reference to its financial position as on March 31, 2022, found that the bank failed to establish a system for periodic review of the risk categorisation of accounts. RBI concluded this was non-compliance with provisions of the Reserve Bank of India (Know Your Customer (KYC)) Direction, 2016 and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and comply with KYC requirements going forward, especially the periodic review of account risk categorisation. No customer-facing operational restriction is described in this release.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 7 Aug 2023
- Effective From
- 7 Aug 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank