The Reserve Bank of India (RBI) has imposed monetary penalties on two cooperative banks for non-compliance with regulatory directions related to lending norms and Know Your Customer (KYC) requirements.
RBI levied a penalty of Rs 50,000 on the Amravati Merchants Sahakari Bank Ltd., Amravati, Maharashtra, for violating RBI directions on loans and advances to directors, their relatives, and firms in which they are interested.
The action followed RBI’s statutory inspection of the bank with reference to its financial position as on March 31, 2025, which revealed that the bank had sanctioned certain director-related loans.
In a separate action, RBI imposed a penalty of Rs 3 lakh on the Karnal Central Cooperative Bank Ltd., Haryana, for deficiencies in KYC compliance. The bank was found to have failed to establish a system for periodic review of risk categorisation of accounts and lacked robust software for identifying and reporting suspicious transactions.
RBI clarified that the penalties relate solely to regulatory compliance deficiencies and do not affect the validity of transactions undertaken by the banks with their customers.