RBI Slams Nabapalli Cooperative Bank with ₹3 Lakh Penalty Over Critical KYC Failures
The Reserve Bank of India (RBI) has levied a significant monetary penalty against The Nabapalli Cooperative Bank Limited, West Bengal. This action follows supervisory findings related to non-compliance with critical 'Know Your Customer (KYC)' directions issued by the central regulator.The RBI imposed the fine through an official order dated June 22, 2026. The bank has been penalized ₹3 lakh (Rupees Three Lakh only).
Details of the Monetary Penalty Imposed
The penalty was levied in exercise of powers vested in the RBI under the Banking Regulation Act, 1949. Specifically, the action falls under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Act.The regulatory scrutiny included a statutory inspection of the bank conducted by the RBI. This inspection was conducted with reference to the bank's financial position as of March 31, 2025.
Failure in KYC Compliance Mandate
Following supervisory findings of non-compliance and subsequent correspondence regarding these deficiencies, a notice was issued to The Nabapalli Cooperative Bank Limited. The bank was advised to show cause regarding why a penalty should not be imposed.Upon reviewing the bank’s reply, additional submissions, and oral evidence from a personal hearing, the RBI sustained a specific charge against the institution. This charge centered on regulatory non-compliance related to customer record management.
The core deficiency identified by the regulator was that the bank failed to upload its customers' KYC records onto the Central KYC Records Registry (CKYCR). This failure occurred within the prescribed timeline set by the RBI directions.
Regulatory Stance and Future Actions
The imposition of this monetary penalty is a direct consequence of regulatory compliance deficiencies, as determined by the RBI’s process. The regulator has confirmed that this action does not prejudice the validity of any transaction or agreement made between the bank and its customers.Furthermore, the RBI stated that the monetary fine is without prejudice to any other action it may initiate against The Nabapalli Cooperative Bank Limited concerning these compliance failures.
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