Excellent Co-operative Bank, Mumbai, attracted the heaviest fine of Rs four lakh for failing to periodically update KYC details of customers.
June 23, 2021 / 08:05 PM IST
RBI | PC-Shutterstock
The Reserve Bank of India (RBI) on June 23 imposed monetary penalties on Janseva Sahakari Bank, Pune, Excellent Co-operative Bank, Mumbai, and The Ajara Urban Co-operative Bank, Kolhapur, for non-compliance with various regulations.
Excellent Co-operative Bank, Mumbai, was fined Rs four lakh for contravention of the directions issued by RBI on ‘Maintenance of Deposit Accounts’ and ‘Know Your Customer (KYC)’. Janseva Sahakari Bank was fined Rs two lakh for contravention of the direction issued by the RBI on KYC. The Ajara Urban Co-operative Bank was also fined Rs two lakh for contravention of direction issued by the RBI on maintenance of deposit accounts.
The inspection report of Excellent Co-operative Bank, based on its financial position as on 31 March, 2019, revealed that the bank had no system of periodic updation of KYC information of customers in the bank and it had not conducted annual review of inoperative accounts. Janseva Sahakari Bank had not introduced a system of periodic review of risk categorisation of accounts. The inspection report of The Ajara Urban Co-operative Bank revealed that the annual review of inoperative accounts had not been done by the bank.
Based on these reports, the RBI issued notices to the banks to show cause as to why penalty should not be imposed for violation of the said directions. After considering the banks’ replies and oral submissions, the RBI came to the conclusion that the charges of non-adherence and violation of RBI directions were substantiated and warranted imposition of monetary penalty.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the central bank said in separate statements for all three banks.