The Reserve Bank of India has imposed a monetary penalty of ₹ 5.00 lakh (Rupees Five Lakh only) on the The Kutch Mercantile Co-operative Bank Ltd., Rapar, Dist. Kutch (Gujarat) in exercise of the powers vested in it under the provisions of Section 47A (1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for violation pertaining to:

1. non-adherence to the operational instructions issued by Reserve Bank of India u/s 36(1) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)

2. high non-compliance with KYC norms and

3. no system in place to detect suspicious transactions.

The Reserve Bank of India had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply. After considering the facts of the case and the bank’s reply, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty.

Ajit Prasad
Assistant Adviser

Press Release: 2015-2016/1916