RBI Imposes ₹7.5 Lakh Penalty On Himachal Pradesh State Co-operative Bank Ltd. for KYC Non-compliance

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 7.5 lakh on the Himachal Pradesh State Co-operative Bank Ltd. for non-compliance with certain Know Your Customer (KYC) directions.

The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

As per the press release dated April 13, 2026, the action was based on findings from a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) relating to the bank's financial position as on March 31, 2025.

Following the inspection, the RBI issued a show-cause notice to the bank and, after considering its reply as well as oral submissions made during the personal hearing, proceeded in the matter.

It was found that the bank had failed to put in place a system for periodic review of risk categorisation of accounts at least once every six months.

RBI found that the charge against the bank was sustained, warranting the imposition of a monetary penalty.

The central bank clarified that the penalty was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

It added that the imposition of the penalty is without prejudice to any other action that may be initiated by RBI against the bank.