Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Nov 2024
Case Brief
RBI, by order dated November 15, 2024, imposed a monetary penalty of Rs 1.00 lakh on The Vijay Commercial Co-operative Bank Ltd., Rajkot, Gujarat. The penalty was imposed for non-compliance with RBI directions on Know Your Customer (KYC) norms, specifically for failing to carry out periodic review of risk categorisation of certain accounts at least once in six months. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following statutory inspection, supervisory findings, a show-cause notice, and oral submissions by the bank.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after supervisory inspection and a show-cause process. The sustained charge was that the bank failed to carry out periodic review of risk categorisation of certain accounts at least once every six months, contrary to RBI’s directions on Know Your Customer (KYC) norms.
Operating Impact
The bank must absorb the monetary penalty and continue complying with RBI’s KYC requirements, including periodic six-monthly review of risk categorisation for applicable accounts. The order does not itself impose a forward-looking operational restriction, but it signals ongoing supervisory scrutiny and possible further action if similar lapses recur.
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
- 15 Nov 2024
- Effective From
- 15 Nov 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank