RBI Action: RBI imposed heavy fine on 2 banks for not following KYC rules, do you have an account in them?
RBI has imposed a fine on two banks. During the inspection, lapses in rules were detected. After the completion of the investigation, the central bank has taken strict action. Let us find out whether this will affect the customers or not?
RBI Action: The Reserve Bank of India (RBI) has taken action against two banks. A monetary penalty has been imposed for violation of certain guidelines issued on “Know Your Customer (KYC)”. In this regard, RBI has issued a notification on Thursday, July 3. This step has been taken by the central bank under various provisions of the Banking Regulation Act 1949. A fine of Rs 5 lakh has been imposed on both the banks together.
RBI has imposed a fine of Rs one lakh on District Central Co-operative Bank Limited, Durg Chhattisgarh. At the same time, a penalty of Rs four lakh has been imposed on Shri Chhani Nagrik Sahakari Bank Limited located in Vadodara, Gujarat. An inspection was done in March 2024 regarding the financial status of the banks. During this it was found that the rules were not being followed properly. After which a notice was issued and RBI was asked for the reason. It was decided to impose a penalty on the basis of the response received on the information and the presentations given during the investigation.
District Central Co-operative Bank Limited added these rules
This bank did not upload the KYC records of some customers to the central KYC record registry within the stipulated time. Periodic updating of KYC of some customers was not done as per the periodicity. Apart from this, instead of a unique identification code for each individual customer, multiple customer identification codes were allotted to some individual customers.
Why was Shri Chhani Nagrik Sahakari Bank Limited fined?
Shri Chhani Nagrik Sahakari Bank Limited did not conduct a periodic review of the risk classification of certain accounts at least once in 6 months. Customers were not provided 24*7 access to report unauthorized electronic banking transactions through multiple channels. Apart from this, it was also not able to implement cyber security controls prescribed by RBI under the Cyber Security Structure. This action will not affect any transaction or agreement between the customers and the bank. There is no need for account holders to worry.
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