Recorded RBI impact
Fine: Rs 25.0 L
Monetary penalty · Fresh imposition
Published by RBI
25 Feb 2010
Case Brief
The Reserve Bank of India penalised The Bank of Rajasthan Ltd. with a monetary penalty of Rs. 25 lakh under Section 47A(1)(b) of the Banking Regulation Act, 1949. The penalty was imposed after RBI found that the bank had violated directions issued under Section 35A regarding acquisition of immovable properties, deleted records from its IT systems, failed to adhere to KYC/AML guidelines in opening and conducting certain accounts, committed irregularities in the conduct of accounts of a corporate group, and did not provide certain documents sought by RBI while misrepresenting that those documents were unavailable. RBI had issued a show-cause notice, considered the bank’s written reply, and concluded that the violations were substantiated and warranted the penalty.
Why RBI Acted
The Reserve Bank of India imposed a penalty under Section 47A(1)(b) of the Banking Regulation Act, 1949 after concluding that the bank’s violations were substantiated. The bank was found to have violated RBI directions under Section 35A in the area of acquisition of immovable properties, deleted records from its IT systems, not adhered to KYC/AML guidelines in opening and conducting certain accounts, committed irregularities in the conduct of accounts of a corporate group, and failed to provide certain documents sought by RBI while misrepresenting that the documents were not available.
Operating Impact
The bank must absorb the penalty and address the compliance gaps identified by RBI, including controls over immovable-property transactions, IT record retention, KYC/AML processes, account conduct oversight, and responsiveness to regulatory information requests. The action has no direct operating ban, but it signals heightened supervisory scrutiny and the need for remediation to avoid further enforcement.
Regulatory Basis
- Section 47A(1)(b) of the Banking Regulation Act, 1949
- Section 35A of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 25.0 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank