Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹4.00 lakh on Smriti Nagrik Sahakari Bank Maryadit, Mandsaur (Madhya Pradesh) by order dated March 14, 2023. The penalty was issued for contravention of RBI directions relating to Exposure Norms & Statutory/Other Restrictions on UCBs and Know Your Customer (KYC), under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949. RBI’s inspection findings showed that the bank sanctioned loans beyond the prescribed ceiling to nominal members, lacked periodic review of customers’ risk categorization, failed to update KYC periodically according to risk category, and had no system to generate alerts for monitoring and reporting suspicious transactions. RBI stated that the action was based on regulatory compliance deficiencies and was not a pronouncement on the validity of any transaction or agreement with customers.
Action Snapshot
- Primary Impact
- Fine: Rs 4.00 L
- Entity Type
- Co-operative bank
- Location