The RBI enforcement action against Sultanpur Jilla Sahkari Bank for breaching statutory provisions and regulatory directions constitutes a direct enforcement action against a bank within the payments scope.
The violations include failures in KYC requirements, suspicious transaction reporting, and credit information submission—all payments-related compliance obligations that suggest secondary relevance to payment system integrity.
Specialism
The RBI imposed a monetary penalty of ₹300,000 on a named bank for identified regulatory breaches including AML/CTF-related failures (suspicious transaction reporting, KYC requirements), making this an enforcement action with a financial penalty component.
The penalty was specifically for failures in suspicious transaction identification and reporting, KYC compliance, and credit information submission—all core AML/CTF regulatory obligations.
2026-06-23 08:23:36·pthandapani@vixio.com
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TITLE: India's Reserve Bank Imposes Monetary Penalty on Sultanpur Jilla Sahkari Bank for Regulatory Non-Compliance
BODY:
On June 22, 2026, the Reserve Bank of India (RBI) announced it had imposed a monetary penalty of ₹300,000 on Sultanpur Jilla Sahkari Bank Ltd., located in Uttar Pradesh, for breaching statutory provisions and failing to comply with RBI directions. The penalty was issued by RBI order dated June 19, 2026, under powers conferred by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 (BR Act) and Section 25 read with Section 23 of the Credit Information Companies (Regulation) Act, 2005.
The National Bank for Agriculture and Rural Development (NABARD) conducted a statutory inspection of the bank with reference to its financial position as of March 31, 2025. Following supervisory findings, RBI issued a show-cause notice to the bank. After considering the bank's response, additional submissions, and oral submissions during a personal hearing, RBI sustained charges warranting the penalty. The bank had failed to submit credit information of its borrowers to all four Credit Information Companies (CICs); establish a system for periodic review of risk categorisation of accounts; implement robust software for effective identification and reporting of suspicious transactions; and transfer eligible unclaimed amounts in certain accounts to the Depositor Education and Awareness Fund within prescribed timeframes. These violations related to non-compliance with RBI directions on membership of CICs by co-operative banks and Know Your Customer (KYC) requirements.
RBI stated the action addresses deficiencies in statutory and regulatory compliance and does not pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. The imposition of this monetary penalty remains without prejudice to any other action RBI may initiate against the bank.
Press Releases - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Press Releases ( 359 kb ) Date : Jun 22, 2026 RBI imposes monetary penalty on Sultanpur Jilla Sahkari Bank Ltd., Uttar Pradesh The Reserve Bank of India (RBI) has, by an order dated June 19, 2026, imposed a monetary penalty of ₹3 lakh (Rupees Three Lakh only) on Sultanpur Jilla Sahkari Bank Ltd., Uttar Pradesh (the bank) for contravention of the provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and for non-compliance with certain directions issued by RBI on ‘Membership of Credit Information Companies (CICs) by Co-operative Banks’ and ‘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 BR Act and Section 25 read with Section 23 of the Credit Information Companies (Regulation) Act, 2005. The statutory inspection of the bank was conducted by the National Bank for Agriculture and Rural Development (NABARD), with reference to its financial position as on March 31, 2025. Based on supervisory findings of contravention of statutory provisions / 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 provisions and 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: submit credit information of its borrowers to all the four CICs; put in place a system of periodic review of risk categorisation of accounts; put in place a robust software for effective identification and reporting of suspicious transactions; and transfer eligible unclaimed amounts in certain accounts to the Depositor Education and Awareness Fund within the prescribed time. This action is based on deficiencies in statutory and 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. 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