RBI Action: This bank broke the rules related to KYC, RBI imposed a fine of lakhs, do you have an account with it?

RBI has taken action against another bank. A fine of more than 2 lakhs has been imposed. During the inspection, deficiencies in compliance with the guidelines were detected.

RBI Action: The Reserve Bank of India ensures proper compliance of rules in all banks and NBFCs across the country. Once again RBI’s action has come to the fore. Murshidabad District Central Cooperative Bank of West Bengal has been hit. A heavy monetary penalty has been imposed. The Central Bank (RBI) has also issued a notice.

RBI has imposed a monetary penalty of Rs 2.10 lakh on Murshidabad District Central Cooperative Bank Limited for non-compliance with the instructions issued on “Know Your Customer” and “Subscription of Credit Information Companies by Cooperative Banks”. This step has been taken by the Central Bank using the powers conferred under the provisions of Section 46 (4) (i) and 56 as well as 47 A (1) (C) of the Banking Act 1949 and Section 23 (4) along with Section 25 (1) (iii) of the Information Company Regulation 2005.

Notice was issued before penalty

A statutory inspection was conducted by the National Bank for Agriculture and Rural Development (NABARD) in respect of the financial position of the bank on March 31, 2024. During this, it was found that the instructions were not being followed properly. Based on the findings, a show cause notice was issued. After considering the response to the notice and the oral submissions made during the personal hearing, an order was issued to impose monetary penalty on confirmation of the allegations.

These rules were violated

According to the notice, the bank failed to conduct a periodic review of the risk classification of accounts, which should have been at least once in 6 months. It was also unable to do a periodic update of KYC of its customers. It also failed to submit the credit information of its borrowers to three credit information companies. Please note that this action is based on deficiencies in regulatory compliance, it is not intended to affect any transaction or agreement between any customer and the bank.

The post RBI Action: This bank broke the rules related to KYC, RBI imposed a fine of lakhs, do you have an account with it? first appeared on informalnewz.

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