The Reserve Bank of India has imposed a monetary penalty of Rs.5.00 lakh (Rupees Five Lakh) on the Rajkot Nagarik Sahakari Bank Ltd., Rajkot (Gujarat), in exercise of the powers vested in it under the provisions of Section 47A (1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for violations relating to income recognition and asset classification norms, violation of Section 6 (1) (j) of the Act, non compliance to the instructions in respect of issuance of Demand Draft/Postal Order against cash, non adherence to Know Your Customer norms and persistence of certain deficiencies pointed out in earlier inspection reports.

The Reserve Bank of India had issued a Show Cause Notice to the bank based on the finding of inspection for the financial position as on March 31, 2012. In response, the bank submitted a written reply and made personal submission to the Regional Director, Reserve Bank of India, Ahmedabad. After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.

Alpana Killawala

Principal Chief General Manager

Regulatory penalty imposed for breaches of income recognition, asset classification, KYC and issuance norms following inspection. A monetary penalty was imposed on Rajkot Nagarik Sahakari Bank Ltd. under statutory powers of the Banking Regulation Act for breaches including income recognition and asset classification deficiencies, non compliance with KYC norms, improper issuance of demand drafts/postal orders against cash, violation of a management conduct provision, and persistence of earlier inspection deficiencies after the bank responded to a show cause notice.