The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3 lakh on The Nabapalli Cooperative Bank Limited, West Bengal, for non-compliance with directions related to Know Your Customer (KYC) requirements.
The penalty was imposed by an RBI order dated June 22, 2026. According to the central bank, the action was taken under the powers vested in RBI under Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
RBI announced the action in a press release numbered 2026-2027/544. The release was issued under the name of Brij Raj, Chief General Manager.
What the RBI inspection covered
RBI said a statutory inspection of The Nabapalli Cooperative Bank Limited was conducted with reference to the bank’s financial position as on March 31, 2025. Such inspections are part of RBI’s supervisory process for checking whether regulated banks are following applicable rules and directions.
The inspection and related supervisory examination resulted in findings of non-compliance with RBI directions. RBI said these findings were based on the inspection process and related correspondence.
After the findings, RBI issued a notice to the bank. The notice asked the bank to show cause why a monetary penalty should not be imposed for failing to comply with the applicable directions.
Bank’s response and RBI’s decision
RBI said it considered the bank’s reply to the show-cause notice. It also considered additional submissions made by the bank and oral submissions made during a personal hearing.
After reviewing these materials, RBI concluded that one charge of non-compliance was sustained. On that basis, RBI said the charge warranted imposition of a monetary penalty.
The press release does not describe the penalty as being linked to a customer dispute, a specific customer loss, or the validity of any particular transaction. RBI framed the action as a regulatory compliance matter.
Specific KYC-related charge
The charge sustained by RBI was that The Nabapalli Cooperative Bank Limited failed to upload customer KYC records onto the Central KYC Records Registry, or CKYCR, within the prescribed timeline.
KYC, or Know Your Customer, refers to the customer identification and record-keeping framework that banks are required to follow under RBI directions. CKYCR is the registry referred to in RBI’s release for maintaining customer KYC records. The issue cited by RBI was not that the records were absent from all bank systems, but that the bank failed to upload customer KYC records to CKYCR within the required time.
RBI did not provide the number of customer records involved, the period of delay, or any separate details about individual accounts in the press release.
Penalty limited to regulatory compliance
RBI clarified that the monetary penalty is based on deficiencies in regulatory compliance. The central bank stated that the action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
This clarification means the penalty order should be read as a supervisory action for breach of RBI directions, rather than as a finding on customer contracts or transactions.
RBI also said the penalty is without prejudice to any other action that may be initiated by the central bank against The Nabapalli Cooperative Bank Limited. This means the ₹3 lakh penalty does not prevent RBI from taking any further action, if considered necessary under applicable law and regulation.
Source: Reserve Bank of India Press Releases.