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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹5.00 lakh on Lokmangal Co-operative Bank Limited, Solapur, Maharashtra for non-compliance with KYC (Know Your Customer) directions. The order was issued on April 23, 2024, under the powers conferred by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The RBI’s statutory inspection, with reference to the bank’s financial position as on March 31, 2022, revealed deficiencies in regulatory compliance. The bank failed to:
Conduct periodic review of risk categorization of accounts.
Carry out periodic updation of KYC as per the risk categorization of customers.
Following the inspection, the bank was issued a show-cause notice and given an opportunity to present its case. After considering the bank’s submissions, RBI concluded that the charges were substantiated, warranting the penalty.
RBI clarified that this action is limited to regulatory compliance deficiencies and does not question the validity of any transactions or agreements between the bank and its customers. The penalty is also without prejudice to any further regulatory action that RBI may take against the bank.
[RBI]