RBI imposed a fine of 1.5 crore rupees each on three Public Sector Banks for violating KYC norms

Reserve Bank of India (RBI) on 29 April 2015 imposed a fine of 1.5 crore rupees each on three Public Sector Banks (PSBs) for violating Know Your Customer (KYC)/Anti Money Laundering (AML) norms. These three PSBs are Bank of Maharashtra, Dena Bank and Oriental Bank of Commerce.

The penalties have been imposed in exercise of powers vested in it under the provisions of Section 47(A) (1) of the Banking Regulation Act, 1949, taking into account the violations of the instructions issued by the RBI from time to time.

RBI findings revealed violation of certain regulatory guidelines issued by the RBI as also other disquieting actions on the part of the banks, as under:

•    Non-adherence to certain aspects of KYC norms of the Reserve Bank like customer identification and acceptance procedure,
•    Non-adherence to the Reserve Bank’s instructions on monitoring of transactions in customer accounts,
•    Non-adherence to the Reserve Bank’s instructions regarding funds received through Real Time Gross Settlement System (RTGS).

Besides, it  cautioned eight other banks, namely Central Bank of India, Bank of India, Punjab and Sind Bank, Punjab National Bank, State Bank of Bikaner & Jaipur, UCO Bank, Union Bank of India and Vijaya Bank.

RBI decided not to impose any monetary penalty on the above said eight banks as the banks’ explanations were judged to be reasonable. However, these banks have been cautioned to put in place appropriate measures and review the same from time to time to ensure strict compliance of KYC requirements in future.

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