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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹28 lakh on Uttar Pradesh Co-operative Bank Limited, Lucknow for non-compliance with the Know Your Customer (KYC) Directions, 2016 and RBI’s directives on “Customer Service in State / District Central Co-operative Banks (StCBs / DCCBs)”.
The penalty was levied under Section 47A (1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following deficiencies identified during statutory inspection. The central bank clarified that the action is based on regulatory compliance lapses and does not question the validity of any transactions undertaken by the bank with its customers.
RBI’s inspection, conducted with reference to the bank’s financial position as of March 31, 2020, revealed that: The bank failed to implement robust software for effective identification and reporting of suspicious transactions. It levied penal charges for non-maintenance of minimum balances in inoperative accounts during the financial year 2019-20.
Following the inspection, RBI issued a show-cause notice. After reviewing the bank’s written and oral submissions during the personal hearing, RBI concluded that the charges were substantiated and warranted the imposition of the monetary penalty.
[RBI]