Recorded RBI impact
Fine: Rs 7.50 L
Monetary penalty · Fresh imposition
Published by RBI
22 May 2023
Case Brief
The Reserve Bank of India imposed a penalty on The Kanyakumari District Central Co-operative Bank Ltd., Nagercoil, Tamil Nadu, by order dated May 18, 2023. RBI found that the bank had failed to transfer eligible unclaimed deposits to the Depositor Education and Awareness Fund and had breached KYC Direction, 2016 requirements, including risk categorisation lapses and allotting multiple Customer Identification Codes to the same customers. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) and section 56 of the Banking Regulation Act, 1949 (AACS).
Why RBI Acted
RBI imposed a monetary penalty after an inspection found that the bank had not transferred eligible unclaimed deposits to the DEA Fund and had violated KYC Direction, 2016, including issues in risk categorisation and allotting multiple Customer Identification Codes to the same customers. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) and section 56 of the Banking Regulation Act, 1949 (AACS), following a show-cause notice and consideration of the bank's reply and oral submissions.
Operating Impact
The bank must bear the monetary penalty and address the compliance deficiencies identified by RBI. The order does not invalidate customer transactions, but it signals continued supervisory scrutiny over the bank's DEA Fund transfer and KYC compliance practices.
Regulatory Basis
- section 26A read with section 56 of Banking Regulation Act, 1949 (AACS)
- section 47 A (1) (c) read with section 46 (4) (i) and section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 7.50 L
- Order Date
- 18 May 2023
- Effective From
- 18 May 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank