Regulatory Alerts2026-06-08
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RBI imposes monetary penalty on The Karnal Central Cooperative Bank Limited, Haryana
The Reserve Bank of India imposes a monetary penalty of ₹3 lakh on The Karnal Central Cooperative Bank Limited, Haryana for non-compliance with Know Your Customer directions. The penalty is based on supervisory findings that the bank failed to implement a system for periodic review of risk categorisation of accounts and lacked robust software for identifying and reporting suspicious transactions. This action is taken under Sections 47A(1)(c), 46(4)(i), and 56 of the Banking Regulation Act, 1949, following a statutory inspection by NABARD.
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( 177 kb ) Date : Jun 08, 2026 RBI imposes monetary penalty on The Karnal Central Cooperative Bank Limited, Haryana
The Reserve Bank of India (RBI) has, by an order dated June 3, 2026, imposed a monetary penalty of ₹3 lakh (Rupees Three Lakh only) on The Karnal Central Cooperative Bank Limited, Haryana (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, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had failed to:
put in place a system of periodic review of risk categorisation of accounts; and
put in place a robust software for effective identification and reporting of suspicious transactions.
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: 2026-2027/416
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