Share
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.00 lakh on The Howrah District Central Co-operative Bank Ltd., Howrah, West Bengal, for non-compliance with its ‘Know Your Customer (KYC) Directions, 2016’. The penalty was levied under the powers conferred on RBI by section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank, conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2023, revealed deficiencies in regulatory compliance. Based on the findings, RBI issued a notice to the bank asking it to show cause why a penalty should not be imposed.
After examining the bank’s written response, additional submissions, and oral representations during the personal hearing, RBI concluded that the charges were substantiated. The deficiencies included the bank’s failure to undertake periodic updation of KYC for customer accounts and the absence of a system for risk categorisation of accounts.
RBI clarified that this action is taken solely for regulatory non-compliance and is not intended to comment on the validity of any transaction or agreement with the bank’s customers. The imposition of the penalty is without prejudice to any other action that RBI may initiate against the bank.
[RBI]