This action is based on deficiency in regulatory compliance
FinTech BizNews Service
Mumbai, September 12, 2025: The Reserve Bank of India (RBl) has, imposed a monetary penalty of Rs50,000 (Rupees Fifty Thousand only) on Sikkim State Co-operative Bank Ltd and Rs3 lakh (Rupees Three Lakh only) on Progressive Mercantile Co-operative Bank Limited, Dist. Ahmedabad, Gujarat.
1 The Reserve Bank of India (RBI) has, by an order dated September 08, 2025, imposed a monetary penalty of Rs50,000/- (Rupees Fifty Thousand only) on Sikkim State Co-operative Bank Ltd. (the bank) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2024. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter-alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty:
The bank had failed to upload the KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
2 The Reserve Bank of India (RBl) has, by an order dated September 08, 2025, imposed a monetary penalty of Rs3 lakh (Rupees Three Lakh only) on Progressive Mercantile Co-operative Bank Limited, Dist. Ahmedabad, Gujarat (the bank) for non-compliance with the certain directions issued by RBI on ‘Inspection & Audit Systems in Primary (Urban) Co-operative Banks’, ‘Know Your Customer’ and ‘Customer Protection - Limiting Liability of Customers of Co-operative Banks in Unauthorized Electronic Banking Transactions’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by the RBI with reference to its financial position as on March 31, 2024. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank's reply to the notice, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
