The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3 lakh on Jilla Sahkari Bank Limited, Kanpur, Uttar Pradesh, for non-compliance with its directions on Know Your Customer (KYC) norms.
The penalty has been levied through an order dated January 30, 2026, under the powers conferred on RBI by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act.
The action follows a statutory inspection conducted by NABARD with reference to the bank’s financial position as on March 31, 2025. Based on supervisory findings and subsequent correspondence, RBI issued a show-cause notice to the bank. After examining the bank’s written response and oral submissions during a personal hearing, RBI concluded that regulatory non-compliance had occurred.
According to the RBI, the bank failed to put in place a system for periodic review of risk categorisation of customer accounts, with the required frequency being at least once every six months, as mandated under KYC guidelines.
The central bank clarified that the penalty is based solely on deficiencies in regulatory compliance and does not question the validity of any transaction or agreement entered into by the bank with its customers. RBI also stated that the imposition of the penalty is without prejudice to any other action that may be initiated against the bank.