RBI imposes monetary penalty on The Yavatmal Urban Co-operative Bank Limited, Yavatmal (Maharashtra)

Case Brief

By an order dated August 05, 2022, RBI imposed a monetary penalty of Rs 3.50 lakh on The Yavatmal Urban Co-operative Bank Limited, Yavatmal (Maharashtra). The penalty was imposed for contravention of RBI directions on Know Your Customer (KYC), after inspection revealed that the bank had not carried out periodic updation of customer KYC and had no system for periodic review of risk categorization of accounts. RBI stated that the penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, and that the action was based on deficiencies in regulatory compliance.