The Reserve Bank of India (RBI) has levied a monetary penalty of Rs 1.50 lakh on Jai Bhawani Sahakari Bank Ltd., Pune, Maharashtra, for violating provisions of the Banking Regulation Act, 1949. The bank was found in contravention of section 26A, along with section 56, concerning non-compliance with RBI’s directives on Know Your Customer (KYC) norms and the maintenance of deposit accounts for Urban Co-operative Banks.
The penalty was imposed following an RBI inspection based on the bank’s financial position as of March 31, 2023. The inspection revealed that the bank failed to transfer eligible unclaimed deposit amounts to the Depositor Education and Awareness Fund within the prescribed period. It also failed to conduct periodic risk categorization reviews of accounts and undertake annual reviews of inoperative accounts.
The penalty is a result of regulatory deficiencies observed during the statutory inspection and does not impact any transactions or agreements between the bank and its customers. RBI clarified that this action does not preclude further legal measures that may be initiated against the bank.