Money & Banking

RBI imposes monetary penalty on seven banks

Our Bureau Mumbai | Updated on February 12, 2019

The Reserve Bank of India has imposed a monetary penalty of ₹1.50 crore each on Allahabad Bank, Bank of Maharashtra and Indian Overseas Bank, and ₹1 crore on Andhra Bank.

The penalty has been imposed on the public sector banks (PSBs) for non-compliance with various directions issued on monitoring of end use of funds, exchange of information with other banks, classification and reporting of frauds, and on restructuring of accounts.

The central bank also imposed a monetary penalty of ₹20 lakh each on HDFC Bank, IDBI Bank and Kotak Mahindra Bank for non-compliance with various directions issued by the RBI on Know Your Customer (KYC) norms / anti-money laundering (AML) standards,

In the case of these seven banks, the RBI, in a statement, said: “These penalties have been imposed in exercise of powers vested in RBI under the provisions of …the Banking Regulation Act, 1949, taking into account failure of the above banks to adhere to the aforesaid directions issued 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 banks with their customers.”

Published on February 12, 2019

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