**Executive Summary**
On September 22, 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹2 lakh on Makarpura Industrial Estate Co-operative Bank Ltd., Vadodara, Gujarat, due to non-compliance with KYC and cyber security framework directions. The penalty was imposed following a statutory inspection with reference to the bank's financial position as of March 31, 2024. The press release was issued on September 25, 2025.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹2 lakh on Makarpura Industrial Estate Co-operative Bank Ltd.
* The penalty is for non-compliance with RBI's KYC and cyber security directions.
* The penalty is imposed under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
* **Reasons for Penalty:**
* The bank failed to carry out periodic review of risk categorization of certain accounts at least once in six months.
* The bank failed to implement certain cyber security control measures as prescribed by RBI.
* **RBI's Stance:**
* The action is based on deficiencies in regulatory compliance.
* The penalty does not affect the validity of transactions or agreements between the bank and its customers.
* The penalty is without prejudice to any other action that may be initiated by RBI against the bank.
**Impact Analysis**
**Makarpura Industrial Estate Co-operative Bank Ltd.**
* **Impact:**
* Financial penalty of ₹2 lakh.
* Reputational risk due to non-compliance.
* **Action Required:**
* Pay the monetary penalty.
* Implement corrective measures to address the identified deficiencies in risk categorization and cyber security control measures.
* Ensure future compliance with RBI's directions.
**RBI**
* **Impact:**
* Upholding regulatory standards within the banking sector.
* Maintaining the integrity and stability of the financial system.
* **Action Required:**
* Monitor the bank's compliance with corrective measures.
* Take further action if necessary to ensure full compliance.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator imposing the monetary penalty.
Makarpura Industrial Estate Co-operative Bank Ltd.: The bank on which the monetary penalty is imposed, located in Vadodara, Gujarat.
Banking Regulation Act, 1949: The Act under which the powers are conferred to RBI to impose the penalty.
RBI on 'Know Your Customer (KYC)': RBI guidelines on Know Your Customer, for non-compliance of which penalty was imposed
'Basic Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs)' read with 'Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs) – A Graded Approach': The cyber security framework for which non-compliance led to a penalty
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
September 25, 2025
RBI imposes monetary penalty on Makarpura Industrial Estate Co-operative
Bank Ltd., Vadodara, Gujarat
The Reserve Bank of India (RBl) has, by an order dated September 22, 2025,
imposed a monetary penalty of ₹2 lakh (Rupees Two Lakh only) on Makarpura
Industrial Estate Co-operative Bank Ltd., Vadodara, Gujarat (the bank) for non-
compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’ and
‘Basic Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs)’
read with ‘Comprehensive Cyber Security Framework for Primary (Urban)
Cooperative Banks (UCBs) – A Graded Approach’. 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:
i) carry out periodic review of risk categorisation of certain accounts, with such
periodicity being at least once in six months; and
ii) implement certain cyber security control measures under the Cyber Security
Framework prescribed by RBI.
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.
(Puneet Pancholy)
Press Release: 2025-2026/1171 Chief General Manager