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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.25 lakh (Rupees One lakh Twenty-Five Thousand only) on Nagrik Sahakari Bank Maryadit, Jagdalpur, Chhattisgarh, for non-compliance with directions issued by RBI to Urban Co-operative Banks regarding the Board of Directors, Exposure Norms, Statutory/Other Restrictions, and Know Your Customer (KYC) guidelines. The penalty was imposed under the powers vested in RBI under Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, considering the bank’s failure to adhere to these directions.
The inspection report of the bank, based on its financial position as of March 31, 2021, revealed multiple violations, including donations exceeding the prescribed limit, non-adherence to prudential inter-bank (gross) exposure limits and counterparty limits, lack of periodic review of risk categorisation of accounts, and absence of a system to detect suspicious transactions. A notice was issued to the bank, requesting it to show cause why a penalty should not be imposed.
After evaluating the bank’s replies, oral submissions during the personal hearing, and additional submissions, RBI concluded that the charges of non-compliance were substantiated and warranted the imposition of the monetary penalty. This action is based on deficiencies in regulatory compliance and does not affect the validity of any transaction or agreement entered into by the bank with its customers.
[RBI]