Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
11 Nov 2024
Case Brief
By an order dated November 05, 2024, RBI imposed a monetary penalty of ₹50,000 on The Sathamba People's Co-operative Bank Ltd., Aravalli, Gujarat. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after RBI's inspection and subsequent proceedings found non-compliance with directions on Know Your Customer (KYC). Specifically, the bank failed to put in place a system for periodic updation of KYC of its customers and failed to carry out periodic review of risk categorisation of accounts at least once in six months.
Why RBI Acted
RBI imposed a penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after supervisory findings showed non-compliance with RBI directions on Know Your Customer (KYC). The bank was found to have failed to establish a system for periodic updation of KYC for customers and to review risk categorisation of accounts at least once in six months.
Operating Impact
The bank must bear the monetary penalty, but the release does not impose any new operational restriction or suspension. The action highlights ongoing KYC compliance obligations and leaves RBI free to take any other action separately, if warranted.
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
- 5 Nov 2024
- Effective From
- 5 Nov 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank