RBI imposes monetary penalty on Jammu and Kashmir Bank Limited

Case Brief

RBI imposed a monetary penalty of Rs 2,50,00,000 on Jammu and Kashmir Bank Limited for non-compliance with multiple RBI directions. The violations related to CRILC data reporting, loans and advances restrictions, and SWIFT-related operational controls. RBI said the bank failed to ensure data integrity and quality in CRILC submissions, extended term loans without adequate due diligence on project viability and bankability, did not ensure loan servicing was not funded from budgetary resources, and generated SWIFT messages without confirming the underlying transactions were recorded in CBS. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949, after RBI considered the bank’s reply and oral submissions and concluded that the charges were substantiated.