RBI imposes monetary penalty on Madhya Pradesh-based cooperative bank

Mumbai (Maharashtra) [India], June 6 : The Reserve Bank of India (RBl) on Monday said it has imposed a monetary penalty of Rs 50,000 on Jila Sahakari Kendriya Bank Maryadit, Morena, Madhya Pradesh, for non-compliance of Know Your Customer (KYC) related norms.
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, the RBI said in a statement.
The inspection report of the bank based on its financial position as of March 31, 2020, revealed, inter alia, that the bank had no system in place to identify suspicious transactions, in contravention of/non-compliance with the directions 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," the RBI said.
After considering the bank's replies, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty, the central bank added.
The 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, the central bank noted in the statement.