RBI imposes monetary penalty on The Sundargarh District Central Co-operative Bank Ltd., Odisha

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 3 lakh on The Sundargarh District Central Co-operative Bank Ltd., Odisha. RBI said the action followed a statutory inspection and subsequent show-cause process that found contraventions of sections 20 and 26A read with section 56 of the Banking Regulation Act, 1949, along with non-compliance with RBI directions on KYC norms. The sustained issues included sanctioning loans to directors, not transferring eligible unclaimed amounts to the Depositor Education and Awareness Fund, and failing to follow customer due diligence when opening certain new accounts. RBI clarified that the penalty is based on regulatory compliance deficiencies and does not pronounce on the validity of any transaction, and that it is without prejudice to any other action that may be initiated.