The Reserve Bank of India may take some time to act against banks violating the know-your-customer (KYC) norms, according to Rajiv Takru, Secretary, Department of Financial Services.

“We should not expect any action from the RBI in the next week or 10 days. The Board of Financial Supervision in the RBI has to follow a certain process,” he said.

Once the banks give their detailed responses to the show-cause notices, the apex bank will examine them and then decide on the line of action, he said.

Expressing disappointment over banks flouting KYC norms, Takru clarified that the degree of overall KYC conformity of scheduled commercial banks is good.

“The system by and large is sound. It (existing regulations) was more a result of perhaps inadequate attention to existing rules and regulations,” he added.

On raising the quantum of penalty to be imposed on banks, Takru said the amount of Rs 1 crore is “insignificant” in the present day context, and rules need to be changed to hike the penalty.

LPG SUBSIDY

“It requires a change in the rule. As soon as the limit is increased, you will see heavier fines,” he added.

Asked about the preparedness of the Government and banks to handle the transfer of liquefied petroleum gas (LPG) subsidies directly into bank accounts of consumers, Takru said it will depend on the database provided by the oil and marketing companies (OMCs).

“There are 14 crore LPG customers out there and we are awaiting the database from OMCs. Once the database comes, we have to give it to branches and then the Aadhaar number and the bank account numbers to each customer,” he said.

The Central Government will roll out the next phase of direct benefits transfer, including LPG subsidy, in 78 more districts from July 1. This is in addition to the 43 districts the Government started to cover during phase-I.

> satyanarayan.iyer@thehindu.co.in

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