Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
25 Apr 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5,00,000 on The Bhuj Co-operative Bank Ltd., Bhuj, Dist. Kutch. RBI said the bank had violated instructions relating to KYC norms, AML guidelines, temporary overdrafts (TOD), and the use of the bank's name without the word "Co-operative". After issuing a show-cause notice and considering the bank's written reply and personal submissions, RBI concluded that the violations were substantiated and warranted penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS).
Why RBI Acted
The Reserve Bank of India imposed a monetary penalty after finding that violations were substantiated following a show-cause notice, written reply, and personal submissions. The breaches related to RBI instructions on Know Your Customer (KYC) norms, Anti-Money Laundering (AML) guidelines, temporary overdrafts (TOD), and improper use of the bank's name without the word "Co-operative". The penalty was imposed under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS).
Operating Impact
The bank must absorb the monetary penalty and address the compliance lapses identified by RBI. The findings indicate continued supervisory concern around customer due diligence, AML controls, TOD practices, and correct use of the bank's registered name.
Regulatory Basis
- Section 47 A(1)(b)
- Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank