RBI cracks down on poor KYC/AML compliance in co-op banks
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2010-11/300 · issued 07 Dec 2010 · ~1 min read
Quick answerRBI has flagged very poor compliance with KYC/AML norms under PMLA, 2002 among co-operative banks. Banks must appoint a Deputy General Manager or higher as Principal Officer and ensure strict adherence to reporting CTRs, STRs, and CCRs to FIU-IND.
What changed
FIU-IND observed that compliance with KYC/AML/CFT measures under PMLA, 2002 remains very poor, with some banks not even appointing a sufficiently senior Principal Officer. RBI now mandates that co-operative banks appoint an officer of at least Deputy General Manager rank as Principal Officer, supported by a team experienced in KYC/AML/CFT issues.
What it means for you
Co-operative banks face increased regulatory scrutiny and must urgently strengthen their AML frameworks. Failure to comply could lead to supervisory action. The requirement for a senior Principal Officer signals that RBI expects top-level ownership of compliance, not just a box-ticking exercise.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Appoint a Principal Officer of at least Deputy General Manager rank immediately.
Ensure the Principal Officer is supported by a team of officers well-versed in KYC/AML/CFT.
Strictly comply with PMLA, 2002 obligations for filing CTRs, STRs, and CCRs to FIU-IND within stipulated timelines.
Review and strengthen internal KYC/AML policies and training programs.
Who it affects
State Co-operative Banks, Central Co-operative Banks, Principal Officers of co-operative banks, Compliance and AML teams in co-operative banks
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 03:28 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the minimum rank required for the Principal Officer as per this circular?
The Principal Officer must be of at least Deputy General Manager rank.
What reports must banks file under PMLA, 2002?
Banks must file Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs), and Counterfeit Currency Reports (CCRs) to FIU-IND within the stipulated period.
Why did RBI issue this circular?
FIU-IND observed very poor compliance with KYC/AML/CFT measures under PMLA, 2002, including failure to appoint a senior Principal Officer. RBI is mandating corrective steps.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1578: RPCD.CO.RCB.AML.BC.No.32/07.40.00/2010-11 — "Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards / Combating of Financing of Terrorism (CFT”
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/300
RPCD.CO.RCB.AML.BC. No.32/07.40.00/ 2010-11
December 7, 2010
The Chief Executives of
all State and Central Co-operative Banks
Dear Sir,
Know Your Customer (KYC) norms/Anti-Money Laundering (AML)
Standards/Combating of Financing of Terrorism (CFT)/Obligation of banks
under Prevention of Money Laundering Act, 2002 (PMLA) -
Level of Compliance
Please refer to our circulars RPCD.AML.BC.No.80/07.40.00/2004-05 dated February 18, 2005 , RPCD.CO.RF.AML.BC.No.28 /07.40.00/2009-10 dated September 30, 2009 and RPCD.CO.RF.AML.BC. No. 88/07.40.00/2009-10 dated June 25, 2010 on Know Your Customer (KYC) norms/Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT) /Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002.
2. The PMLA, 2002 and the rules made therein imposed obligations on banks to furnish various Reports viz. Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs) and Counterfeit Currency Reports (CCRs) to Financial Intelligence Unit-India (FIU-IND) within the stipulated period as provided therein. FIU-IND has observed that the level of compliance with the KYC/AML/CFT measures under PMLA, 2002 is still very poor and some banks have not even taken a policy decision to appoint the Principal Officer of a sufficiently high level who could wield required authority in the bank to implement the KYC/AML/CFT measures sincerely.
3. In view of above, it is advised that banks should take steps to ensure strict compliance with PMLA, 2002 and to appoint officer of the rank of at least Deputy General Manager as Principal Officer and he should be assisted by a team of experienced officers well-versed in KYC/AML/CFT issues.
4. Please acknowledge receipt to our Regional Office concerned.
Yours faithfully,
(B.P.Vijayendra)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/300 · issued 07 Dec 2010. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6133&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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