AnyTime News 
“Failure in Risk Review System Costs Bank ₹1 Lakh Fine by RBI”
Anytime News Network | By Pooja Srivastava
Reserve Bank of India has imposed a monetary penalty of ₹1 lakh on Hardoi Jilla Sahkari Bank Ltd. for non-compliance with its KYC guidelines, highlighting regulatory gaps in the bank’s internal processes.
The penalty, ordered on April 21, 2026, was imposed under provisions of the Banking Regulation Act. The central bank found that the cooperative bank failed to implement a proper system for periodic review of risk categorisation of accounts, which is mandated to be conducted at least once every six months.
The issue came to light during a statutory inspection carried out by National Bank for Agriculture and Rural Development based on the bank’s financial position as of March 31, 2025. Following the findings, RBI issued a show-cause notice to the bank. After reviewing its response, the central bank concluded that the charge of non-compliance was valid.
RBI clarified that the penalty is strictly related to deficiencies in regulatory compliance and does not question the validity of any transactions carried out by the bank with its customers. It also stated that this action does not preclude further regulatory measures if required.
Experts believe that strict adherence to KYC norms is essential for maintaining transparency, preventing financial fraud, and ensuring systemic stability. RBI’s action serves as a warning to cooperative banks to strengthen their compliance frameworks.
