The Reserve Bank of India (RBI) has, by an order dated November 05, 2024, imposed a monetary penalty of ₹50,000 (Rupees Fifty thousand only) on The Sathamba People’s Co-operative Bank Ltd., Aravalli, Gujarat (the bank) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC).
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with Reserve Bank of India directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, Reserve Bank of India found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty.
The bank had failed to:
- put in place a system for periodic updation of KYC of its customers; and
- carry out periodic review of risk categorisation of accounts at least once in six months.
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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by Reserve Bank of India against the bank.
