What changed
RBI imposed a penalty by order dated June 19, 2026, against the bank for violations found during NABARD's statutory inspection as of March 31, 2025. The bank failed to comply with Section 26A of the BR Act and RBI directions on CIC membership and KYC norms.
What it means for you
Banks must ensure timely submission of credit data to all CICs, maintain periodic risk review systems, deploy effective AML software, and transfer unclaimed deposits to DEAF within prescribed timelines. Non-compliance invites monetary penalties and signals RBI's zero-tolerance stance on regulatory gaps.
What you must do
- Verify your bank's credit data submission to all four CICs is complete and timely.
- Review and update risk categorisation of accounts at least annually.
- Upgrade transaction monitoring software to detect and report suspicious activities effectively.
- Audit unclaimed deposit accounts and transfer eligible amounts to DEAF within the mandated period.
Who it affects
Co-operative banks, Compliance and AML teams, Deposit operations departments
What specific KYC failure led to this penalty?
The bank did not implement a periodic review of risk categorisation of accounts and lacked robust software for identifying and reporting suspicious transactions, violating RBI's KYC directions.
Does this penalty affect the bank's customer transactions?
No, the penalty is for regulatory non-compliance and does not invalidate any customer agreements or transactions.