The Reserve Bank of India has imposed a monetary penalty of ` 5.00 lakh (Rupees Five Lakh only) on The Vijay Co-operative Bank Ltd., Ahmedabad, in exercise of the powers vested in it under the provisions of Section 47A (1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for violation of Know Your Customer (KYC) norms and violation of operational instructions viz. distributing dividend without obtaining prior approval from RBI.
The Reserve Bank of India had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply. After considering the facts of the case and the bank's replies as also personal submission in the matter, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of the penalty.
Source: RBI Press Release