The Reserve Bank of India has imposed a monetary penalty of Rs 7.5 lakh on The Himachal Pradesh State Co-operative Bank Ltd. for non-compliance with Know Your Customer (KYC) norms.
The penalty, ordered on April 10, 2026, was levied under provisions of the Banking Regulation Act, 1949 following supervisory findings related to lapses in regulatory compliance.
The issue came to light during a statutory inspection conducted by National Bank for Agriculture and Rural Development with reference to the bank’s financial position as on March 31, 2025. RBI observed that the bank had failed to establish a system for periodic review of risk categorisation of accounts, which is required at least once every six months under KYC guidelines.
After issuing a show-cause notice and reviewing the bank’s response and oral submissions, RBI concluded that the charge was sustained, warranting the penalty.
The central bank clarified that the action is strictly based on compliance deficiencies and does not affect the validity of any customer transactions. It also noted that the penalty is without prejudice to any further action that may be initiated.
