RBI imposes monetary penalty on Mehsana District Central Co-operative Bank Ltd., Mehsana (Gujarat)

Case Brief

RBI, by order dated March 24, 2023, imposed a monetary penalty of ₹2.10 lakh on Mehsana District Central Co-operative Bank Ltd., Mehsana (Gujarat). The penalty followed a NABARD statutory inspection that found non-compliance with RBI’s KYC Direction, 2016 and directions on membership of Credit Information Companies by co-operative banks. RBI noted deficiencies including lack of a system to review risk categorization and periodically update KYC documents of existing customers, and failure to submit data to three CICs as of March 31, 2022. After notice, reply, and oral submissions, RBI concluded that the contraventions were substantiated and warranted penalty.