RBI imposes monetary penalty on Shillong Co-operative Urban Bank Limited, Meghalaya

Case Brief

By an order dated February 08, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on Shillong Co-operative Urban Bank Limited, Meghalaya. The penalty was for non-compliance with RBI’s Know Your Customer (KYC) Directions, 2016, after inspection revealed deficiencies including failure to put in place a system for risk categorisation of accounts and failure to undertake periodic KYC updation of customer accounts. RBI stated that the action was based on regulatory compliance deficiencies and did not pronounce on the validity of any transaction or agreement entered into by the bank with its customers.