The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 50,000 on The Pali District Central Co-operative Bank Ltd., Rajasthan, for non-compliance with its Know Your Customer (KYC) guidelines.

The penalty, issued through an order dated March 17, 2026, follows supervisory findings based on a statutory inspection conducted by NABARD with reference to the bank’s financial position as on March 31, 2025.

The RBI found that the bank had failed to implement a system for periodic review of risk categorisation of customer accounts, with the required frequency of at least once every six months, thereby violating regulatory norms.

After issuing a show-cause notice and reviewing the bank’s response along with oral submissions, the central bank concluded that the charge was sustained, warranting the penalty.

The RBI clarified that the action is based on deficiencies in regulatory compliance and does not impact the validity of transactions carried out by the bank with its customers. It also stated that the penalty is without prejudice to any further action that may be initiated.