Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
10 Aug 2021
Case Brief
By an order dated August 10, 2021, RBI imposed a monetary penalty of ₹2.00 lakh on The Malkapur Urban Cooperative Bank Limited, Malkapur, Maharashtra. RBI said the bank had contravened / failed to comply with directions issued to Urban Co-operative Banks on Board of Directors and Know Your Customer (KYC). The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after an inspection report (based on the bank's position as on March 31, 2019) and after considering the bank's reply and oral submissions.
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 because the bank failed to adhere to RBI directions for Urban Co-operative Banks relating to Board of Directors and Know Your Customer (KYC) requirements. The inspection report for the bank's financial position as on March 31, 2019 found contraventions/non-compliance, and RBI concluded the charge was substantiated after considering the bank's reply and oral submissions.
Operating Impact
The bank must absorb the monetary penalty and address the compliance gaps identified by RBI, particularly in board governance and KYC adherence. The release does not indicate a restriction on operations, but it signals regulatory findings that may require stronger internal controls and future compliance remediation.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 10 Aug 2021
- Effective From
- 10 Aug 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank