RBI Imposes ₹7.5 Lakh Penalty on Himachal Pradesh State Co-operative Bank for KYC Violations
Summary
The Reserve Bank of India imposed a monetary penalty of ₹7,50,000 on The Himachal Pradesh State Co-operative Bank Ltd. for non-compliance with KYC directions. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The violation involved failure to conduct periodic review of risk categorisation of accounts at least once every six months.
What changed
RBI has imposed a monetary penalty of ₹7,50,000 on The Himachal Pradesh State Co-operative Bank Ltd. for failure to comply with KYC directions. The specific violation was failure to implement a system for periodic review of risk categorisation of accounts at least once in six months. The penalty was imposed following a statutory inspection by NABARD, issuance of a show cause notice, and a personal hearing. This action is based on deficiencies in regulatory compliance and is without prejudice to any other action RBI may take.
Co-operative banks and other financial institutions should review their KYC compliance programs to ensure they have adequate systems for periodic review of risk categorisation. The six-month periodicity requirement is a specific compliance obligation under RBI KYC directions. Banks should maintain documentation demonstrating compliance with these requirements.
What to do next
- Review KYC periodic review systems for compliance with six-month requirement
- Ensure risk categorisation of accounts is reviewed at least once every six months
- Document compliance with RBI KYC directions
Penalties
₹7,50,000 (Rupees Seven Lakh Fifty Thousand)
Archived snapshot
Apr 14, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Press Releases
| () | |
| Date : Apr 13, 2026 | |
| RBI imposes monetary penalty on The Himachal Pradesh State Co-operative Bank Ltd., Himachal Pradesh | |
| | The Reserve Bank of India (RBI) has, by an order dated April 10, 2026, imposed a monetary penalty of ₹7,50,000/- (Rupees Seven Lakh Fifty Thousand only) on The Himachal Pradesh State Co-operative Bank Ltd., Himachal Pradesh (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 National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2025. 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 put in place a system of periodic review of risk categorisation of accounts, with such periodicity being at least once in six months.
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.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/78 | | The Reserve Bank of India (RBI) has, by an order dated April 10, 2026, imposed a monetary penalty of ₹7,50,000/- (Rupees Seven Lakh Fifty Thousand only) on The Himachal Pradesh State Co-operative Bank Ltd., Himachal Pradesh (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 National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2025. 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 put in place a system of periodic review of risk categorisation of accounts, with such periodicity being at least once in six months.
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.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/78 |
| The Reserve Bank of India (RBI) has, by an order dated April 10, 2026, imposed a monetary penalty of ₹7,50,000/- (Rupees Seven Lakh Fifty Thousand only) on The Himachal Pradesh State Co-operative Bank Ltd., Himachal Pradesh (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 National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2025. 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 put in place a system of periodic review of risk categorisation of accounts, with such periodicity being at least once in six months.
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.
(Brij Raj)
Chief General Manager
Press Release: 2026-2027/78 | |
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