Pune, August 22, 2023: The Reserve Bank of India (RBI) has taken stringent action against Walchand Nagar Sahakari Bank Ltd., located in Pune, Maharashtra. In an order dated August 10, 2023, the RBI has imposed a monetary penalty of ₹4.00 lakh (Rupees Four Lakh only) on the bank. This penalty comes as a consequence of the bank’s failure to comply with certain provisions outlined in the ‘Reserve Bank of India – Know Your Customer (KYC) Direction, 2016.’ The decision to impose the penalty was made by exercising the authority granted to RBI under section 47 A (1) (c) read with sections 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949.
It’s important to note that this action has been initiated due to identified deficiencies in regulatory compliance. The intent behind the penalty is not to question the validity of any transactions or agreements executed by the bank with its customers.
The background leading up to this penalty involves the statutory inspection conducted by RBI on the financial status of the bank as of March 31, 2022. Additionally, an examination of the Risk Assessment Report and related correspondence was undertaken. The inspection revealed several lapses, including the bank’s failure to allot a Unique Customer Identification Code (UCIC) to individual customers and its failure to conduct periodic reviews of risk categorization of accounts.
In response to these findings, a notice was issued to the bank, urging it to provide reasons why a penalty should not be imposed for its failure to adhere to the aforementioned directions. Following the bank’s reply, RBI deliberated on the matter and concluded that the charge of non-compliance with its directives was valid. Consequently, the imposition of a monetary penalty was deemed necessary.
