The Reserve Bank of India has imposed a monetary penalty of Rs 5 lakh on Mumbai-based Abhyudaya Co-operative Bank for violation of its instructions/ guidelines. A special scrutiny conducted in the Vashi branch of the bank to check the operations in the account of M/s Speak Asia Online Private Ltd , an online survey company, had revealed that the bank had violated KYC/AML guidelines, the Central Bank said in a statement. “The bank had also violated instructions by freezing the account and thus tipping off the customer. It had also closed the audit trail by closing the account,” said the RBI. The Central Bank observed that the bank had not adhered to KYC/AML guidelines on an earlier occasion involving RTGS transactions with Union Bank of India, Zaveri Bazar Branch. Thus, there was evidence of recurrence of non-compliance in implementation of KYC norms, it added. The RBI had issued a show cause notice to the bank, in response to which the bank submitted a written reply. After considering the facts of the case and bank’s reply in the matter, the RBI came to the conclusion that the violations were substantiated and classified as ‘Major’ which warranted imposition of penalty, said the statement.

(This article was published on December 19, 2012)
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