The Reserve Bank of India has imposed a monetary penalty of Rs 5.00 lakh on the Kutch Mercantile Co-operative Bank based in Rapar of Kutch.
The UCB was penalized for violation pertaining to: non-adherence to the operational instructions issued by Reserve Bank of India u/s 36(1) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) high non-compliance with KYC norms and no system in place to detect suspicious transactions.
The Reserve Bank of India had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply.
After considering the facts of the case and the bank’s reply, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty.