RBI imposed Monetary Penalty this Co-operative Bank; Know Name of Bank

The Reserve Bank of India (RBI) has imposed Monetary Penalty on The Islampur Urban Co-operative Bank Limited. RBI notified this via issuing press release.

In Press Release RBI Stated, “RBI has imposed a monetary penalty of Rs.2.00 lakh (Rupees Two lakh only) on The Islampur Urban Co-operative Bank Limited, Islampur, (Maharashtra) (the bank) for non-compliance with provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and certain provisions of the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’ and ‘Maintenance of Deposit Accounts-UCBs’, by an order dated August 03, 2023.”

This penalty was levied by the RBI in accordance with the requirements of Section 47 A(1)(c), Section 46(4)(i), and Section 56 of the BR Act. This action is based on regulatory compliance problems and is not intended to rule on the legitimacy of any transaction or agreement entered into by the bank with its clients.

The RBI’s statutory inspection of the bank, which included an examination of the Risk Assessment Report and all related correspondence, revealed, among other things, that the bank had not transferred the eligible amount to the Depositor Education and Awareness Fund (DEAF) and had not conducted a periodic review of risk categorisation of its customers, as well as an annual review of inoperative accounts.

In addition, a notice was given to the bank instructing it to show cause why a penalty should not be levied for violating statutory requirements and the directives made therein.

After reviewing the bank’s written response to the notice, the RBI determined that the allegation of non-compliance with the aforementioned statutory requirements and RBI directives was substantiated and justified the imposition of monetary penalties on the bank.