Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
1 Jul 2024
Case Brief
By an order dated June 26, 2024, RBI imposed a monetary penalty of ₹1 lakh on The Bank Employees’ Co-operative Bank Ltd., West Bengal. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection with reference to the bank’s financial position as on March 31, 2023 found non-compliance with RBI directions on Know Your Customer (KYC). RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the charge of not implementing a system of periodic review of risk categorisation of accounts had been sustained.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory review found non-compliance with RBI’s KYC directions. The bank was issued a show-cause notice; after considering its reply and oral submissions, RBI concluded that the charge of not implementing a system of periodic review of risk categorisation of accounts was sustained, warranting penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must bear the monetary penalty and remains subject to RBI supervision. The release also makes clear that this penalty is without prejudice to any other action RBI may initiate in the future.
Regulatory Basis
- section 47A (1) (c)
- sections 46(4) (i)
- section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 26 Jun 2024
- Effective From
- 26 Jun 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank