RBI Slams Co-operative Bank with ₹3 Lakh Fine Over Critical KYC Compliance Lapses
The Reserve Bank of India (RBI) has leveled a significant monetary penalty against The United Puri-Nimapara Central Co-operative Bank Limited, Odisha. The fine was imposed for non-compliance related to critical 'Know Your Customer (KYC)' directions issued by the regulator.This punitive action underlines the RBI's strict focus on compliance within the banking sector. The bank has been penalized ₹3 lakh for its failure to adhere to prescribed KYC protocols.
Basis of the Penalty and Regulatory Violation
The penalty was confirmed via an order dated July 14, 2026. This action taken by the RBI is based on provisions under Section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.The specific charge against the bank was its failure to upload customer KYC records onto the Central KYC Records Registry (CKYCR). This deficiency in regulatory compliance led directly to the imposition of the monetary penalty.
Supervisory Findings from Statutory Inspection
A statutory inspection of The United Puri-Nimapara Central Co-operative Bank Limited was conducted by National Bank for Agriculture and Rural Development (NABARD). This inspection covered the bank's financial position as of March 31, 2025.Following the supervisory findings showing non-compliance with RBI directions, a notice was issued to the bank. The bank subsequently replied to this notice, and the penalty was confirmed after considering all submissions and oral hearings.
Implication of Monetary Penalty
The imposition of this monetary penalty is explicitly linked to regulatory compliance deficiencies only. The action does not aim to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.It is important to note that the RBI stated this penalty is without prejudice to any other actions it may choose to initiate against the bank based on these findings.
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