RBI imposes monetary penalty on The Karnal Central Cooperative Bank Limited, Haryana

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹3 lakh on The Karnal Central Cooperative Bank Limited, Haryana for non-compliance with RBI directions on Know Your Customer (KYC). After a statutory inspection by NABARD and a show-cause process, RBI found that the bank had not put in place a system for periodic review of risk categorisation of accounts and had not installed robust software for effective identification and reporting of suspicious transactions. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.