Following non-compliance over ALS Standards, RBI imposes Rs 17.5 mn monetary penalty on four major banks

Mumbai, July 3: Citing non-compliance of certain centrally directed provisions in relation to Know Your Customer norms and Anti Money Laundering Standards, the Reserve Bank of India moved up imposing monetary penalty to the four major banks named the Allahabad Bank, the Corporation Bank, the Punjab National Bank and the UCO bank.

 

According to the circular issued by the Reserve Bank, the amount of penalty for the quadrants totally counts to Rs 17.5 million, where the Allahabad Bank, the Punjab National Bank and the UCO bank are to pay Rs 5 million each and the rest Rs 2.5 million by the Corporation Bank,

 

“The penalties have been imposed in exercise of powers vested in RBI taking into account the failure of the banks to adhere to the aforesaid directions issued by RBI. This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers”, said RBI in its statement.

 

Based on a complaint, the Central Bank examined current accounts opened by four entities, further observing that the banks had failed to comply with certain provisions of directions issued by RBI on Know Your Customer (KYC) norms, Anti Money Laundering Standards and Opening of Current Accounts.

 

“Based on the findings, notices were issued to the banks advising them to show cause as to why penalty should not be imposed for non-compliance with the directions”, it said further adding that the conclusions were drawn after considering the replies from the banks, further being warranted by imposition of monetary penalty.