Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
12 Jan 2012
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on The Ghandhidham Co-operative Bank Ltd., Adipur, Dist. Kutch (Gujarat). The action was taken under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) for violation of RBI's instructions relating to KYC norms. RBI had issued a show-cause notice, considered the bank's written reply, and concluded that the violation was substantiated and merited the penalty.
Why RBI Acted
RBI 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 Reserve Bank of India's instructions relating to Know Your Customer (KYC) norms. The bank had submitted a written reply to the show-cause notice, but RBI found the violation substantiated and sufficient to warrant penalty.
Operating Impact
The bank must absorb the monetary penalty and is expected to strengthen compliance with RBI's KYC requirements. There is no indicated operational restriction, but the action signals supervisory concern over customer identification and due diligence 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