Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
13 Feb 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹50,000 on The Mumbai Mahanagarpalika Shikshan Vibhag Sahakari Bank Ltd., Mumbai for non-compliance with RBI directions on Know Your Customer (KYC). The action followed a statutory inspection with reference to the bank’s financial position as on March 31, 2024, and a show-cause process. RBI found that the bank had failed to conduct periodic review of the risk categorisation of accounts at least once in six months, in contravention of the applicable directions, and imposed the penalty under the Banking Regulation Act, 1949.
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 after supervisory inspection found non-compliance with RBI’s KYC directions. The sustained charge was that the bank failed to review the risk categorisation of accounts periodically, at least once every six months.
Operating Impact
The bank must absorb the monetary penalty and continue complying with RBI’s KYC framework, especially the requirement to periodically review account risk categorisation. The action does not invalidate customer transactions, but it signals ongoing supervisory scrutiny and possible further action if compliance gaps persist.
Regulatory Basis
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 11 Feb 2025
- Effective From
- 11 Feb 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank