Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
18 Nov 2024
Case Brief
By an order dated November 12, 2024, RBI imposed a monetary penalty of ₹1.50 lakh on The Vepar Udhyog Vikas Sahakari Bank Limited, Dist. Dahod, Gujarat. The penalty followed a statutory inspection with reference to the bank’s financial position as on March 31, 2023, and a show-cause notice process. RBI found that the bank had failed to maintain the minimum CRR for certain days, had not periodically updated KYC of certain customers, and had not reviewed risk categorisation of certain accounts at least once in six months. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and subsequent show-cause process found sustained charges of non-compliance. The bank failed to maintain the minimum Cash Reserve Ratio (CRR) for certain days, did not carry out periodic updation of KYC of certain customers, and did not review the risk categorisation of certain accounts at least once in six months. 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 address the compliance gaps identified by RBI, especially around CRR maintenance and KYC/risk-review controls. The order does not invalidate customer transactions, but RBI has noted that further action may still be initiated separately.
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 1.50 L
- Order Date
- 12 Nov 2024
- Effective From
- 12 Nov 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank