The Reserve Bank of India has imposed a monetary penalty of Rs. 5.00 lakh (Rupees five lakh only) on Siwan Central Co-operative Bank Ltd., Bihar in exercise of powers vested in it under the provisions of Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies), for non-adherence to Know Your Customers (KYC) norms and Anti Money Laundering (AML) guidelines.

The Reserve Bank of India had issued a show cause notice to the bank in response to which the bank submitted a written reply. After considering the facts of the case, the bank's reply and personal submissions in the matter, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of the penalty.

Ajit Prasad

Assistant General Manager

KYC and AML non-compliance resulted in regulatory sanction following show cause proceedings and substantiation. The Reserve Bank determined the bank breached KYC norms and AML guidelines, issued a show cause notice, considered the bank's written reply and submissions, found the violation substantiated, and imposed a monetary penalty under statutory banking powers applicable to co operative societies.