RBI slaps monetary penalty on four banks

Allahabad Bank, CorpBank, PNB & UCO Bank get penalty

MUMBAI: The Reserve Bank of India (RBI) has imposed monetary penalty on four banks – Allahabad Bank, Punjab National Bank (PNB), UCO Bank and Corporation Bank, for non-compliance with certain provisions of directions issued by RBI on Know Your Customer (KYC) norms/Anti Money Laundering (AML) Standards and Opening of Current Accounts.

While Corporation Bank has been slapped a monetary penalty of Rs2.5 million, all the other three banks have been imposed a penalty of Rs5 million each.

“The penalties have been imposed in exercise of powers vested in RBI under the provisions of Section 47A (1) (c) read with Section 46(4) (i) of the Banking Regulation Act, 1949,” an RBI statement said.

Based on a complaint, examination of current accounts opened by four entities in the above-mentioned banks was carried out and it was observed that the banks had failed to comply with certain provisions of directions issued by RBI on Know Your Customer (KYC) norms/Anti Money Laundering (AML) Standards and Opening of Current Accounts.

RBI said that 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.

“After considering the replies received from the banks, and submissions made during the personal hearings, RBI came to the charges of non-compliance with RBI directions were sustained and warranted imposition of monetary penalty,” RBI added.

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