The Reserve Bank of India has imposed monetary penalties on two cooperative banks for failing to comply with its regulatory guidelines. Gujarat-based Shree Chhani Nagrik Sahakari Bank Ltd was fined Rs 5 lakh, the higher of the two penalties, while District Central Cooperative Bank Ltd from Chhattisgarh was penalised Rs 1 lakh.
Shree Chhani Bank was found non-compliant on multiple counts, including failure to follow KYC norms, lapses in providing customer protection against unauthorised digital transactions, and not implementing essential cybersecurity controls for urban cooperative banks. RBI’s inspection also revealed the bank had not reviewed risk categorisation of accounts biannually, nor offered 24×7 channels for reporting unauthorised transactions.
Meanwhile, the Chhattisgarh-based lender failed to upload customer KYC data to the central registry on time, did not update KYC information periodically, and assigned multiple customer IDs in violation of RBI rules. RBI clarified the penalties address regulatory deficiencies, not customer transactions.
