The Reserve Bank of India (RBI) on Monday imposed a penalty of Rs 2 lakh on Sarvodaya Cooperative Bank Ltd, Bhandup (W), Mumbai, for non-compliance with directions issued by the central bank about Know Your Customer (KYC).
The central bank said that an inspection report of the bank based on its financial position as on March 31, 2019, revealed that it had not put in place the system of periodic review of risk categorisation of accounts.
Accordingly, the RBI had issued a notice to the bank asking it to show cause as to why penalty should not be imposed on it for noncompliance with the directions.
"After considering the bank' reply to the ntice, RBI came to the conclusion that he aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty," the central bank said in a release.
The RBI said it has imposed the penalty in exercise of powers vested in it under the Banking Regulation Act, 1949.
It also clarified the action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
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