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The Reserve Bank of India (RBI) has recently imposed monetary penalties on three co-operative banks for non-compliance with its Know Your Customer (KYC) directions. These actions are aimed at strengthening regulatory compliance and ensuring robust customer due diligence.
The Bank Employees’ Co-operative Bank Ltd., West Bengal – On June 26, 2024, RBI imposed a penalty of ₹1.00 lakh on the bank for failing to implement a system of periodic review of risk categorisation of accounts. The statutory inspection conducted with reference to the bank’s financial position as on March 31, 2023, revealed supervisory lapses in KYC compliance.
The National Co-operative Bank Ltd., Mumbai, Maharashtra – On June 27, 2024, RBI imposed a penalty of ₹2.00 lakh for non-compliance with KYC directions, specifically for allotting multiple UCICs to its customers. The statutory inspection for the financial position as on March 31, 2023, confirmed the deficiencies.
The Rohika Central Co-operative Bank Ltd., Madhubani, Bihar – On June 26, 2024, a penalty of ₹1.50 lakh was imposed for failing to carry out risk categorisation of all customers, adopt a system of periodic review, and update KYC documents as per RBI directions. The inspection was conducted by NABARD for the financial position as on March 31, 2023.
RBI clarified that these actions are based on deficiencies in regulatory compliance and are not intended to affect the validity of any transactions or agreements of the banks. The imposition of penalties is without prejudice to any other action that may be taken by RBI against these banks.
[RBI]