The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1.50 lakh on Parbhani District Central Cooperative Bank Ltd., Maharashtra, for violating provisions of the Banking Regulation Act and failing to comply with Know Your Customer (KYC) norms.
The action follows a statutory inspection by NABARD based on the bank’s financial position as of March 31, 2024. The RBI found that the bank had sanctioned loans linked to its directors and failed to implement adequate software systems to flag suspicious transactions based on customer risk profiles.
After reviewing the bank’s responses and hearing submissions, the RBI confirmed the violations and levied the penalty under Section 47A of the Banking Regulation Act.
The central bank clarified that the penalty pertains to compliance shortcomings and does not affect the validity of customer transactions. It also stated that further regulatory action, if required, remains open.