Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
17 Feb 2025
Case Brief
RBI imposed a monetary penalty of ₹1.00 lakh on The Muzzafarpur Central Co-operative Bank Ltd. by an order dated February 11, 2025. The action followed a statutory inspection by NABARD and supervisory findings that the bank had not complied with RBI directions on Know Your Customer, specifically by not conducting periodic updation of KYC of its customers. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and then sustained the charge under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory findings showed non-compliance with RBI directions on Know Your Customer. The specific sustained charge was that the bank had not conducted periodic updation of KYC of its customers. 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 continue complying with RBI’s KYC requirements, including periodic updation of customer KYC. The order does not by itself state any operational restriction on depositors or customers, but RBI notes that further action may still be initiated separately.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 11 Feb 2025
- Effective From
- 11 Feb 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank