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The Kapadwanj Peoples Co-operative Bank Limited

Co-operative bankKheda, Gujarat

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 3.00 L

Monetary penalty · Fresh imposition

S2

Published by RBI

25 Nov 2024

Case Brief

By an order dated November 18, 2024, RBI imposed a monetary penalty of ₹3.00 lakh on The Kapadwanj Peoples Co-operative Bank Limited, Kheda, Gujarat. RBI said the bank contravened Section 26A read with Section 56 of the Banking Regulation Act, 1949 and failed to comply with RBI directions on interest rate on deposits and KYC. The cited lapses included delayed transfer of eligible unclaimed amounts to the Depositor Education and Awareness Fund, acceptance of interest-free deposits in non-current accounts, opening savings accounts for institutions whose income was not fully exempt from income tax, and failure to perform risk-based KYC updation and periodic risk categorisation review.

Why RBI Acted

Reporting & disclosureCustomer protectionKYC / AML

RBI imposed a monetary penalty after a statutory inspection found that the bank had failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time, accepted interest-free deposits in accounts other than current accounts, opened savings bank accounts of institutions whose income was not fully exempt from income tax, and did not carry out risk-based KYC updation and periodic review of risk categorisation of accounts. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

Operating Impact

The bank must absorb the penalty and address the compliance lapses identified by RBI, especially around unclaimed deposits, deposit product compliance, and KYC maintenance. The order does not itself impose a business restriction, but RBI noted that further action may still be initiated.

Regulatory Basis

  • Section 26A read with Section 56 of the Banking Regulation Act, 1949
  • Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act, 1949

Action Facts

Primary Impact
Fine: Rs 3.00 L
Order Date
18 Nov 2024
Effective From
18 Nov 2024
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank