Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
24 Oct 2011
Case Brief
The Reserve Bank of India penalised The Baroda Traders Co-operative Bank Ltd., Vadodara, Gujarat, by imposing a monetary penalty of Rs 5.00 lakh under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was levied for non-adherence to Know Your Customer (KYC) norms. RBI had issued a show-cause notice, considered the bank's written reply, and concluded that the contravention was substantiated and warranted punishment.
Why RBI Acted
The Reserve Bank of India imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after concluding that the bank had violated Know Your Customer (KYC) requirements. RBI had issued a show-cause notice, considered the bank's written reply, and found the violation substantiated.
Operating Impact
The bank must absorb the financial penalty and continue operations subject to existing regulatory requirements. The action signals supervisory concern over KYC compliance, with potential implications for customer onboarding and account-monitoring practices.
Regulatory Basis
- Section 47(A)(1)(b) read with 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