Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Feb 2014
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on The Aurangabad District Industrial and Urban Co-operative Bank Ltd., Aurangabad under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated directives on KYC/AML guidelines, did not introduce a Concurrent Audit System, submitted wrong/unsatisfactory/delayed compliance to the RBI Inspection Report, and had concentration of deposits. After issuing a show-cause notice and considering the bank's written reply, RBI concluded that the violations were substantiated and imposed the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was found to have violated RBI directives on KYC/AML guidelines, failed to introduce a Concurrent Audit System, submitted wrong/unsatisfactory/delayed compliance to the RBI Inspection Report, and had concentration of deposits. RBI issued a show-cause notice, considered the bank's written reply, and concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not describe a suspension, restriction on operations, or withdrawal of an existing order. The underlying compliance expectations on KYC/AML, audit systems, inspection reporting, and deposit concentration remain relevant for ongoing supervision.
Regulatory Basis
- Section 47A(1)(b)
- Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank