Reserve Bank of India – Press Releases

The Reserve Bank of India (RBl) has imposed, by an order dated November 09, 2022, a financial penalty of ₹2.50 lakh (Rupees Two lakh fifty thousand solely) on Osmanabad Janata Sahakari Bank Ltd., Osmanabad, Maharashtra (the financial institution) for contravention of/ non-compliance with the instructions issued by the RBI to Urban Co-operative Banks on Know Your Customer (KYC). This penalty has been imposed in train of powers vested in RBI below the provisions of Section 47 A (1) (c) learn with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, considering the failure of the financial institution to stick to the aforesaid instructions issued by RBI.

This motion is predicated on deficiencies in regulatory compliance and isn’t supposed to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its clients.

Background

The inspection report of the financial institution primarily based on its monetary place as on March 31, 2020, revealed, inter alia, that the financial institution had not carried out (i) evaluate of threat categorization of accounts and (ii) updation of KYC of its clients as per prescribed periodicity, in contravention of/ non-compliance with the aforesaid instructions issued by RBI. Based on the identical, a Notice was issued to the financial institution advising it to indicate trigger as to why penalty shouldn’t be imposed for non-compliance with the instructions.

After contemplating the financial institution’s replies and oral submissions made throughout the private listening to, RBI got here to the conclusion that the aforesaid costs of non-compliance with RBI instructions have been substantiated and warranted imposition of financial penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/1200