Jila Sahakari Kendriya Bank Maryadit, Narmadapuram, Madhya Pradesh
Key Details
- Penalty Amount: ₹1 lakh (Rupees One Lakh only).
- Date of Order: August 26, 2025.
- Reason for Penalty: Contravention of provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
- Specific Non-Compliance: The bank failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund (DEAF) within the prescribed time.
- Inspection Reference: The National Bank for Agriculture and Rural Development (NABARD) conducted a statutory inspection based on the bank’s financial position as of March 31, 2024.
Root Cause Analysis (RCA)
The primary root cause for the penalty was the bank’s failure to adhere to the statutory requirement of transferring eligible unclaimed amounts to the DEAF within the specified timeframe. This non-compliance was a finding from a statutory inspection conducted by NABARD. The RBI’s investigation, which included reviewing the bank’s reply and oral submissions, confirmed that the charge was sustained. This suggests a breakdown in internal processes for identifying and transferring such funds.
Preventive Controls & Lessons Learned
- Automated Systems: Implement an automated system to track and identify accounts that have become inoperative or unclaimed for the specified period.
- Regular Audits: Conduct regular internal audits specifically focused on compliance with DEAF regulations to ensure all eligible amounts are transferred on time.
- Employee Training: Provide recurring training for relevant staff on the statutory requirements related to unclaimed deposits and the process for transferring funds to the DEAF.
- Management Oversight: Establish clear management oversight and a reporting framework to monitor the timely transfer of funds to the DEAF.
RBI Press Release
Jilla Sahakari Kendriya Bank Maryadit, Ujjain, Madhya Pradesh
Key Details
- Penalty Amount: ₹1 lakh (Rupees One Lakh only).
- Date of Order: August 26, 2025.
- Reason for Penalty: Contravention of provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
- Specific Non-Compliance: The bank failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund (DEAF) within the prescribed time.
- Inspection Reference: A statutory inspection by NABARD was conducted with reference to the bank’s financial position as on March 31, 2024.
Root Cause Analysis (RCA)
Similar to the Narmadapuram bank, the root cause was the failure to transfer eligible unclaimed funds to the DEAF in a timely manner, which is a contravention of the Banking Regulation Act. This deficiency was identified during a statutory inspection and was found to be a sustained charge against the bank after the RBI considered its response. This indicates a systemic issue with the bank’s compliance process regarding unclaimed deposits.
Preventive Controls & Lessons Learned
- Timely Transfers: Establish a strict schedule and a dedicated team to ensure all eligible unclaimed amounts, along with accrued interest, are transferred to the DEAF on a monthly basis, as required by law.
- Reconciliation & Verification: Implement a robust process for monthly reconciliation of unclaimed accounts and verification of the amounts to be transferred.
- Internal Communication: Improve internal communication to ensure all departments involved in managing customer accounts are aware of their responsibilities related to DEAF compliance.
- Regulatory Compliance Checklist: Develop a comprehensive checklist for regulatory compliance, including DEAF requirements, and conduct periodic reviews to ensure adherence.
RBI Press Release
Jilla Sahakari Kendriya Bank Maryadit, Damoh, Madhya Pradesh
Key Details
- Penalty Amount: ₹50,000 (Rupees Fifty Thousand only).
- Date of Order: August 26, 2025.
- Reason for Penalty: Contravention of provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
- Specific Non-Compliance: The bank had failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund (DEAF) within the prescribed time.
- Inspection Reference: The statutory inspection by NABARD was conducted with a reference to the bank’s financial position as on March 31, 2024.
Root Cause Analysis (RCA)
The penalty was imposed because the bank failed to transfer eligible unclaimed deposits to the DEAF as per the regulations. This deficiency was identified during a statutory inspection conducted by NABARD. The RBI’s review of the bank’s submissions confirmed the non-compliance, leading to the monetary penalty. This suggests a failure in the bank’s operational controls to manage and transfer unclaimed funds in a timely manner.
Preventive Controls & Lessons Learned
- Dedicated Compliance Function: Create or assign a dedicated compliance function to oversee adherence to all regulatory requirements, including the timely transfer of funds to the DEAF.
- Use of Technology: Leverage technology to automate the identification and transfer of unclaimed accounts to minimize human error and ensure timeliness.
- Audit Trail: Maintain a clear and comprehensive audit trail of all actions related to unclaimed deposits, from identification to final transfer, to ensure accountability.
- Board-Level Reporting: Mandate regular reporting to the bank’s board of directors or a relevant committee on the status of compliance with key regulations, including DEAF.
RBI Press Release
The Surat People’s Co-operative Bank Limited, Surat
Key Details
- Penalty Amount: ₹18.30 lakh (Rupees Eighteen Lakh Thirty Thousand only).
- Date of Order: August 28, 2025.
- Reason for Penalty: Non-compliance with certain directions issued by RBI on ‘Reporting of Large Exposures to Central Repository of Information on Large Credits (CRILC) UCBs‘.
- Specific Non-Compliance: The bank did not report credit information for certain borrowers to the CRILC within the prescribed time.
- Inspection Reference: The statutory inspection was conducted by the RBI with reference to the bank’s financial position as of March 31, 2024.
Root Cause Analysis (RCA)
The primary cause of the penalty was the bank’s failure to report credit information on certain borrowers to the CRILC within the required timeframe. This suggests a gap in the bank’s reporting mechanisms and compliance controls for large credit exposures. The deficiency was sustained after the RBI reviewed the bank’s submissions and conducted a personal hearing, highlighting a clear failure in regulatory compliance.
Preventive Controls & Lessons Learned
- Automated Reporting System: Implement an automated system to identify and report all large credit exposures to CRILC in a timely and accurate manner.
- Data Integrity: Ensure the integrity and accuracy of credit data within the bank’s systems to prevent misreporting or non-reporting to CRILC.
- Periodic Reconciliation: Conduct regular reconciliation of large credit exposures to ensure that all eligible accounts are being reported to CRILC.
- Staff Training: Provide mandatory and frequent training to staff on CRILC reporting requirements, including the importance of timeliness and data accuracy.
- Compliance Culture: Foster a strong culture of compliance where adherence to regulatory reporting standards is a key priority at all levels of the organization.