The Reserve Bank of India (RBl) has, by an order dated July 23, 2025, imposed a monetary penalty of Rs 2.50 lakh (Rupees Two Lakh Fifty Thousand only) on Smriti Nagrik Sahakari Bank Maryadit, Mandsaur (Madhya Pradesh) (the bank), for non-compliance with certain directions issued by RBI on ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs) – A Graded Approach’ 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 Banking Regulation Act, 1949.

The statutory inspection of the bank was conducted by the RBI with reference to its financial position as on March 31, 2024. Based on supervisory findings of 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 directions. After considering the bank's reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:

The bank had failed to:

implement certain cyber security controls prescribed by RBI under the Comprehensive Cyber Security Framework; and

carry out periodic updation of KYC of certain customers as per the prescribed periodicity.

This action is based on deficiencies in 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.