The Pratap Co-operative Bank Ltd., Mumbai

Following a statutory inspection for supervisory evaluation with reference to the bank's financial position as on March 31, 2021, RBI found that the bank had not put in place a system for periodic updation of KYC of accounts, a system for periodic review of risk categorisation of accounts, and robust software to generate alerts for effective identification and reporting of suspicious transactions. After a show-cause notice and consideration of the bank's reply, RBI concluded that the non-compliance with the RBI (Know Your Customer) Direction, 2016 was substantiated and imposed a monetary penalty under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.

The bank must absorb the monetary penalty and address the compliance gaps identified by RBI, especially around KYC maintenance, risk categorisation review, and suspicious transaction monitoring. The action does not itself restrict operations, but it signals heightened supervisory scrutiny on the bank's AML/KYC controls.