Recorded RBI impact
Fine: Rs 3.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Dec 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹3.00 lakh on The Manmandir Co-operative Bank Limited, Vita, Maharashtra, after finding non-compliance with RBI directions on Know Your Customer (KYC) and maintenance of deposit accounts for primary urban co-operative banks. The inspection revealed lapses including failure to periodically update KYC for high-risk customers, failure to periodically review risk categorisation of accounts, and failure to carry out the annual review of inoperative or dormant accounts. RBI said the penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found that the bank had not ensured periodic updation of KYC for high-risk customers as required under the KYC Directions, 2016; had not conducted periodic review of risk categorisation of accounts; and had not conducted the annual review of inoperative/dormant accounts. The penalty was imposed 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 monetary penalty and address the compliance deficiencies identified by RBI. Going forward, it is expected to strengthen KYC updation, account risk review, and dormant-account review processes to avoid further supervisory or enforcement action.
Regulatory Basis
- Section 47 A (1) (c) read with Sections 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 3.00 L
- Order Date
- 24 Nov 2023
- Effective From
- 24 Nov 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank