Warud Urban Co-operative Bank Ltd., Warud, Maharashtra

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 the bank had contravened / not complied with RBI directions issued to Urban Co-operative Banks on Exposure Norms & Statutory/Other Restrictions and Know Your Customer (KYC). The Risk Assessment Report, based on the bank's financial position as on March 31, 2021, noted non-compliance with the prudential inter-bank counter party limit and the absence of a robust software system for effective identification and reporting of suspicious transactions. RBI stated the penalty was for regulatory non-compliance and not a comment on the validity of any customer transaction or agreement.

The bank must absorb the monetary penalty and strengthen compliance with exposure norms and KYC/AML controls. The order does not invalidate any customer transaction, but it signals regulatory deficiencies that the bank is expected to remediate going forward.