Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
20 Feb 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Jalgaon District Central Co-operative Bank Ltd., Jalgaon (Maharashtra) for contravention of RBI’s Know Your Customer directions. The inspection, based on the bank’s financial position as on March 31, 2021, found that the bank had not carried out customer risk categorization. After a show-cause process and consideration of the bank’s replies and oral submissions, RBI concluded that the breach was substantiated and warranted penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after finding that The Jalgaon District Central Co-operative Bank Ltd. had contravened / not complied with RBI directions on Know Your Customer (KYC). The inspection report for the bank’s financial position as on March 31, 2021 revealed that it had not carried out risk categorization of customers. RBI issued a show-cause notice, considered the bank’s replies and oral submissions, and concluded the non-compliance was substantiated.
Operating Impact
The bank must absorb the penalty and continue complying with RBI’s KYC requirements, including customer risk categorization. The action does not itself impose an operational restriction, but it signals heightened regulatory scrutiny over the bank’s compliance controls.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.50 L
- Order Date
- 14 Feb 2023
- Effective From
- 14 Feb 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank