The Reserve Bank of India (RBl) has imposed, by an order dated July 22, 2022, a monetary penalty of ₹3.00 lakh (Rupees Three lakh only) on Jila Sahakari Kendriya Bank Maryadit, Rajnandgaon (C.G.) (the bank) for contravention of/ non-compliance with the provisions of the Banking Regulation Act, 1949 (the Act) and directions issued by the Reserve Bank of India (RBI) on Know Your Customer (KYC). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The inspection report of the bank based on its financial position as on March 31, 2020, revealed, inter alia, that the bank had (i) delayed submission of statutory/OSS returns to RBI and NABARD and (ii) no system in place to identify suspicious transactions in contravention of/ non-compliance with the provisions of the Act and directions issued by RBI/NABARD on submission of returns and the directions on Know Your Customer (KYC) respectively. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

After considering the bank's replies, oral submissions made during personal hearing and additional submissions made by the bank, RBI came to the conclusion that the aforesaid charges of non-compliance with the provisions of the Act and RBI directions were substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/587