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The Reserve Bank of India (RBI) has, by an order dated October 17, 2022, imposed a financial penalty of ₹6 lakh (Rupees Six lakh solely) on The Pratap Co-operative Bank Ltd., Mumbai (the financial institution) for non-compliance with sure provisions of the ‘Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016’. This penalty has been imposed in train of powers vested in RBI underneath the provisions of part 47 A (1) (c) learn with part 46 (4) (i) of the Banking Regulation Act, 1949. This motion is predicated on the deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its prospects. Background The Statutory Inspection for Supervisory Evaluation (lSE) of the financial institution was carried out by RBI just about financial institution’s monetary place as on March 31, 2021, and the examination of the Supervisory Letter and all associated correspondences pertaining to the identical revealed, inter alia, that the financial institution had didn’t put in place (i) a system for periodic updation of KYC of accounts, (ii) a system of periodic assessment of threat categorisation of accounts and (iii) a strong software program to throw alerts as half of efficient identification and reporting of suspicious transactions. In furtherance to the identical, a discover was issued to the financial institution advising it to point out trigger as to why penalty shouldn’t be imposed on it for failure to adjust to the mentioned instructions, as said therein. After contemplating the financial institution’s reply to the discover, RBI got here to the conclusion that the cost of non-compliance with the aforesaid RBI instructions was substantiated and warranted imposition of financial penalty. (Yogesh Dayal) Press Release: 2022-2023/1120 |
