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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹50 lakh on Dombivli Nagari Sahakari Bank Limited, Dombivli (Maharashtra) for non-compliance with directions on cyber security frameworks for Urban Cooperative Banks (UCBs). The directions in question included the ‘Basic Cyber Security Framework’ and ‘Comprehensive Cyber Security Framework – A Graded Approach’ for UCBs.
The penalty has been imposed under the provisions of Section 47A (1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following RBI’s findings of regulatory deficiencies. RBI clarified that this action is not intended to question the validity of any transactions or agreements entered into by the bank with its customers.
An IT examination and scrutiny conducted by RBI in March 2022, triggered by a cyber security incident at the bank, revealed that the bank had failed to implement certain mandated controls, which contributed to the incident.
Following the examination, RBI issued a notice to the bank asking it to show cause why a penalty should not be imposed for non-compliance. After reviewing the bank’s written and oral submissions, RBI concluded that the charges were substantiated and warranted the imposition of the monetary penalty.
[RBI]