RBI imposes monetary penalty on Uttar Pradesh Co-operative Bank Limited, Lucknow

Case Brief

RBI, by order dated June 23, 2023, imposed a monetary penalty of ₹28,00,000 on Uttar Pradesh Co-operative Bank Limited, Lucknow for non-compliance with RBI’s KYC Directions, 2016 and its directions on customer service for State/District Central Co-operative Banks. The non-compliance arose from deficiencies identified in NABARD’s statutory inspection, including failure to use robust software for identification and reporting of suspicious transactions and charging penal fees on inoperative accounts for non-maintenance of minimum balances. RBI said the penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank’s reply and submissions.