Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
16 Jun 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on The Jivan Commercial Co-operative Bank Ltd., Rajkot, Gujarat under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated KYC norms, AML guidelines, norms on advances to builders and contractors against security of land, individual and group exposure ceiling norms, and norms for unsecured financial guarantees, and also persisted in irregularities noted in a previous inspection report. After considering the bank's written reply and personal submissions, RBI concluded that the violations were substantiated and warranted penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after finding that the bank had violated Know Your Customer (KYC) norms, anti-money laundering (AML) guidelines, guidelines on advances to builders and contractors against security of land, individual and group exposure ceiling norms, and norms for unsecured financial guarantees. The order also cites persisting irregularities pointed out in the previous inspection report. RBI considered the bank's reply and personal submissions, concluded the violations were substantiated, and imposed a penalty of Rs 5.00 lakh.
Operating Impact
The bank must bear the monetary penalty; the release does not mention any further operational restriction, so depositors and counterparties are not described as facing a new direct limit from this action. The compliance failings cited indicate RBI concern over customer due diligence, lending discipline, exposure concentration, and guarantee controls.
Regulatory Basis
- Section 47A (1)(b) read with 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