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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.25 lakh on Jijau Commercial Co-operative Bank Ltd., Amravati, Maharashtra for non-compliance with directions issued to Urban Co-operative Banks regarding Know Your Customer (KYC) norms and the opening of on-site ATMs. The penalty was levied under the powers vested in RBI under the Banking Regulation Act, 1949, in view of the bank’s failure to adhere to the regulatory guidelines.
An inspection of the bank’s financial position as of March 31, 2021, revealed that it had not conducted periodic KYC updates for its customers and had opened an on-site ATM in violation of RBI directions. A show-cause notice was issued to the bank to explain why a penalty should not be imposed.
After reviewing the bank’s responses, oral submissions during the personal hearing, and additional documentation, RBI concluded that the non-compliance charges were substantiated, warranting the imposition of the monetary penalty. The action reflects deficiencies in regulatory compliance and does not comment on the validity of any transactions or agreements entered into by the bank with its customers.
[RBI]