RBI slaps Rs 2 lakh penalty on Sarvodaya Cooperative Bank
The bank had not put in place the system of periodic review of risk categorisation of accounts, as on 31 March 2019
The Reserve Bank of India (RBI) on Monday imposed a penalty of Rs 2 lakh on Sarvodaya Cooperative Bank Ltd., Bhandup (W), Mumbai (the bank) for contravention of the directions issued by RBI on Know Your Customers (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 Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI,” the RBI said in a statement.
“The 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,” it added.
The bank had not put in place the system of periodic review of risk categorisation of accounts, as per a report based on its financial position as on March 31, 2019. Based on this, the RBI had issued a show cause notice to the bank as to why penalty should not be imposed for non-compliance with the aforesaid directions.
After considering the bank’s reply to the notice, the RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
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