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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2.10 lakh on Mehsana District Central Co-operative Bank Ltd., Mehsana (Gujarat) for contravention of directions related to Know Your Customer (KYC) norms and Membership of Credit Information Companies (CICs) by Co-operative Banks. The penalty has been levied under Section 47A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949 and Section 25 (1) (iii) read with Section 23 (4) of the Credit Information Companies (Regulation) Act, 2005.
The action follows a statutory inspection conducted by NABARD as of March 31, 2022, which revealed that the bank did not have a system to review risk categorization and periodic updation of KYC documents of existing customers. Additionally, the bank failed to submit data, including historic data, to the three CICs, resulting in contravention of RBI directions.
RBI issued a show-cause notice, and after reviewing the bank’s reply and oral submissions during a personal hearing, it concluded that the non-compliance was substantiated, warranting imposition of the penalty.
The penalty highlights RBI’s commitment to ensuring strict adherence to regulatory norms and strengthening compliance mechanisms in co-operative banks.
[RBI]