Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Jul 2024
Case Brief
By an order dated July 11, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on The Vaishali District Central Co-operative Bank Ltd., Bihar. The action followed a statutory inspection by NABARD with reference to the bank’s financial position as of March 31, 2023, and supervisory findings of non-compliance with RBI’s KYC directions. RBI found that the bank failed to put in place a system for periodic review of risk categorisation of accounts, warranting monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed the penalty after a statutory inspection and supervisory findings showed non-compliance with its directions on Know Your Customer (KYC) norms. The sustained charge was the bank’s failure to put in place a system for periodic review of risk categorisation of accounts, leading to action under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must bear the ₹1 lakh penalty, and the order signals continued supervisory scrutiny over its KYC compliance processes. The release also notes that this penalty is without prejudice to any other action RBI may initiate in future.
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 1.00 L
- Order Date
- 11 Jul 2024
- Effective From
- 11 Jul 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank