Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
9 Jan 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹50,000 on Tirupati Urban Co-operative Bank Ltd., Nagpur by order dated January 4, 2023. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 for contravention / non-compliance with RBI directions issued to urban co-operative banks on Know Your Customer (KYC). RBI noted that the bank had not carried out periodic updation of KYC of its customers. After considering the bank’s replies and oral submissions in the personal hearing, RBI concluded the non-compliance was substantiated.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 after finding that Tirupati Urban Co-operative Bank Ltd., Nagpur had contravened / not complied with RBI directions on Know Your Customer (KYC). The risk assessment report showed the bank had not carried out periodic updation of KYC of its customers. After a show-cause notice, RBI held the charge substantiated and imposed a penalty of ₹50,000.
Operating Impact
The bank must absorb the penalty and ensure future compliance with RBI KYC directions, including periodic customer KYC updation. The action does not itself impose an operating restriction, but it signals supervisory concern over AML/KYC compliance for the bank and its customers.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 4 Jan 2023
- Effective From
- 4 Jan 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank