The Reserve Bank of India has imposed a monetary penalty of ₹ 1.00 lakh (Rupees One lakh only) on Kaujalgi Urban Cooperative Credit Bank Ltd., Koujalgi, Karnataka, in exercise of the powers vested in it under the provisions of Section 47 A (1) (b) read with Section 46 (4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) for violating Reserve Bank of India’s instructions/guidelines in respect of ‘The Depositor Education and Awareness Fund Scheme, 2014’ and also for violations of Know Your Customer/Anti-Money Laundering (KYC/AML) directives issued by RBI.

The Reserve Bank of India had issued a Show Cause Notice to the bank, in response to which the bank sought extension of time for complying with the same. Although extension of time was granted twice, the bank had neither submitted compliance nor sought personal hearing. After considering the facts of the case and the bank’s failure to reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of penalty.

Ajit Prasad
Assistant Adviser

Press Release: 2016-2017/2293