The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.10 lakh on Murshidabad District Central Co-operative Bank Ltd., West Bengal, for non-compliance with regulatory guidelines related to Know Your Customer (KYC) norms and membership with Credit Information Companies (CICs).
In an official order dated May 22, 2025, the central bank stated that the penalty was levied under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, as well as Section 25(1)(iii) read with Section 23(4) of the Credit Information Companies (Regulation) Act, 2005.
The action follows a statutory inspection carried out by NABARD based on the bank’s financial position as of March 31, 2024. Subsequent supervisory findings revealed multiple instances of non-compliance with RBI directives. A show-cause notice was issued to the bank, to which it responded both in writing and through oral submissions during a personal hearing.
Upon review, RBI concluded that the bank had:
Failed to carry out periodic reviews of risk categorisation of customer accounts at the mandated interval of at least once every six months;
Not conducted timely KYC updates for its customers; and
Neglected to furnish borrower credit information to three designated Credit Information Companies.
RBI clarified that the penalty is strictly based on deficiencies in regulatory compliance and does not affect the legality of any transactions or agreements between the bank and its customers. The central bank also noted that further regulatory action may be taken, if deemed necessary.