RBI imposes monetary penalty on The Islampur Urban Co-operative Bank Limited., Islampur, Maharashtra

Case Brief

RBI, by order dated August 03, 2023, imposed a monetary penalty of Rs 2.00 lakh on The Islampur Urban Co-operative Bank Limited, Islampur, Maharashtra. The penalty was imposed for non-compliance with Section 26A read with Section 56 of the Banking Regulation Act, 1949 and certain provisions of the RBI (Know Your Customer) Directions, 2016 and Maintenance of Deposit Accounts-UCBs. RBI's inspection found that the bank had not transferred the eligible amount to the Depositor Education and Awareness Fund (DEAF) and had failed to carry out periodic review of customer risk categorisation and annual review of inoperative accounts. After a show-cause notice and review of the bank's reply, RBI held the charges substantiated and levied the penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the BR Act.