Jai Bhawani Sahakari Bank Slapped with Rs1.5 Lakh Penalty for Non-compliance with KYC and Deposit Regulations
Moneylife Digital Team 01 October 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs1.50 lakh penalty on Jai Bhawani Sahakari Bank Ltd for contravention of the provisions of section 26 A of the Banking Regulation Act (BR Act), non-compliance with directions on know-your-customer (KYC) and maintenance of deposit accounts – primary urban cooperative banks (UCBs).
 
RBI statutory inspection of Jai Bhawani Sahakari Bank, which assessed its financial position as of 31 March 2023, revealed several compliance failures. Jai Bhawani Sahakari Bank failed to transfer eligible unclaimed deposits to the depositor education and awareness fund (DEAF) within the prescribed timeframe, did not conduct periodic reviews of the risk categorisation of accounts and neglected to carry out the annual review of inoperative accounts.
 
After considering the facts of the case and the Bank’s reply, RBI concluded that the violations were substantiated and warranted the imposition of a penalty.
 
RBI says, its action is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by the Bank with its customers.
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