RBI imposes penalty on seven banksDate: 13 February 2019 Tags: Banking Laws & Regulations
Reserve Bank of India (RBI) has imposed monetary penalty on seven banks for non-compliance with various directions issued by it on Know Your Customer (KYC) norms and Anti-Money Laundering (AML) standards.
These banks are Allahabad Bank (Rs 1.5 crore), Bank of Maharashtra (Rs 1.5 crore), Indian Overseas Bank (Rs 1.5 crore), Andhra Bank (Rs 1 crore), IDBI Bank (Rs 20 lakh), Kotak Mahindra Bank (Rs 20 lakh) and HDFC Bank (Rs 20 lakh).
Penalties on banks
- They were imposed for non-compliance with various directions issued by RBI on monitoring of end use of funds, exchange of information with other banks, classification and reporting of frauds and on restructuring of accounts.
- They are based on deficiencies in regulatory compliance and are not intended to pronounce upon validity of any transaction or agreement entered into by banks with their customers.
These penalties were imposed by RBI in exercise of powers vested in on it under provisions of Section 47A(1)(c) read with Section 46(4)(i) of Banking Regulation Act, 1949, taking into account failure of above banks to adhere to directions issued by it.