Mumbai (16/12/2021): The Reserve Bank of India (RBl) has imposed, by an order dated December 15, 2021, a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on Jila Sahakari Kendriya Bank Maryadit, Jabalpur (M.P.) (the bank) for contravention of/non-compliance with the provisions of the Banking Regulation Act, 1949 (the Act) and directions issued by the RBI on Know Your Customer (KYC). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Act, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background
The inspection report of the bank based on its financial position as on March 31, 2019 revealed, inter alia, that the bank had (i) delayed submission of statutory/OSS returns to RBI and NABARD and (ii) no system to generate alerts and monitor suspicious transactions in contravention of/non-compliance with the directions issued by NABARD on submission of returns and directions issued by RBI on Know Your Customer (KYC). Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the bank’s replies and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with provisions of the Act & RBI directions were substantiated and warranted imposition of monetary penalty.
