RBI imposes monetary penalty on The Bihar State Co-operative Bank Limited, Patna

Case Brief

By an order dated June 05, 2023, RBI imposed a monetary penalty of ₹60.20 lakh on The Bihar State Co-operative Bank Limited, Patna. The penalty followed a statutory inspection by NABARD for the bank’s position as on March 31, 2020, which found several deficiencies during FY 2019-20. RBI concluded that the bank had contravened provisions of the Banking Regulation Act, 1949 and the BR Rules, and had not complied with RBI directions on KYC, customer service in state/district central co-operative banks, membership of Credit Information Companies, and NABARD directions on off-site surveillance return revisions. RBI stated that the action was based on regulatory compliance deficiencies and did not pronounce on the validity of the bank’s customer transactions or agreements.