Recorded RBI impact
Fine: Rs 2.10 L
Monetary penalty · Fresh imposition
Published by RBI
25 Nov 2024
Case Brief
By an order dated November 20, 2024, RBI imposed a monetary penalty of ₹2.10 lakh on The Lunawada Nagrik Sahakari Bank Limited, Lunawada, Gujarat. The penalty was imposed after RBI found sustained charges of non-compliance with directions on membership of credit information companies by co-operative banks, area of operation/branch authorisation and opening or shifting of offices, and KYC requirements. Specifically, the bank had failed to submit credit information of its borrowers to three CICs, opened an on-site ATM without prior RBI approval, and failed to carry out risk-based updation of KYC and review of risk categorisation of accounts at the prescribed intervals.
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 and Section 25 of the Credit Information Companies (Regulation) Act, 2005. The bank was found to have failed to submit borrower credit information to three credit information companies, opened an on-site ATM without prior approval from RBI, and failed to perform risk-based KYC updation and periodic review of risk categorisation of customer accounts.
Operating Impact
The bank must absorb the penalty and address the underlying compliance gaps. Forward-looking impact is limited to monetary liability, but RBI has indicated that the penalty is without prejudice to any other action that may be initiated for these violations.
Regulatory Basis
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
- Section 25 of the Credit Information Companies (Regulation) Act, 2005
Action Facts
- Primary Impact
- Fine: Rs 2.10 L
- Order Date
- 20 Nov 2024
- Effective From
- 20 Nov 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank