Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
16 Aug 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Cooperative City Bank Ltd., Guwahati under Section 47A(1) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to cooperative societies). RBI found that the bank violated para 4(i) of the KYC and Cash Transactions circular and did not adhere to requirements for identifying and reporting suspicious transactions. After considering the bank’s written reply to the show cause notice, RBI held that the violations were substantiated and imposed a ₹5.00 lakh penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to cooperative societies) because the bank violated para 4(i) of the 2002 KYC and Cash Transactions guidelines read with para 1.7 of the Annex to the 1993 circular, and failed to meet requirements relating to identification and reporting of suspicious transactions. The bank had responded to a show cause notice, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and continue ensuring compliance with KYC, cash transaction, and suspicious transaction reporting requirements. There is no stated restriction on its operations, but the enforcement action signals ongoing regulatory scrutiny.
Regulatory Basis
- Section 47A (1) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 18 Sept 2002
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank