Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Mar 2024
Case Brief
RBI imposed a monetary penalty of ₹1.00 lakh on The Howrah District Central Co-operative Bank Ltd., Howrah, for non-compliance with the RBI’s KYC Directions, 2016. The action followed NABARD’s statutory inspection and a show-cause process. RBI found that the bank had failed to undertake periodic updation of KYC for customer accounts and had not put in place a system for risk categorisation of accounts. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after NABARD’s inspection found that the bank had not complied with RBI’s KYC Directions, 2016. The sustained charges were that the bank failed to undertake periodic updation of KYC of customer accounts and failed to establish a system for risk categorisation of accounts.
Operating Impact
The bank must absorb the monetary penalty and address the KYC control deficiencies identified by RBI. The release also states that the penalty is without prejudice to any other action RBI may initiate, so further supervisory or enforcement action remains possible.
Regulatory Basis
- section 47A (1) (c) read with sections 46(4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 19 Mar 2024
- Effective From
- 19 Mar 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank