RBI penalises 6 more PSU banks for flouting banking norms

Apex bank has imposed penalty of Rs 60 crore on 31 public and private sector banks in last 3 months

GN Bureau | August 23, 2013



Continuing with its action against banks found ostensibly violating banking norms, the Reserve Bank of India on Friday penalised six public sector banks (PSBs) Rs 6.5 crore. With this, 31 banks have till date been penalised since the portal, cobrapost.com, exposed a string of financial institutions allegedly flouting norms.

The banks penalised on Friday are Allahabad Bank, Bank of Maharashtra, Corporation Bank, Dena Bank, IDBI Bank and Indian Bank.

According to a statement released by the apex bank, the penalties range between Rs 50 lakh and Rs 2 crore, depending on the number and seriousness of violations made by the banks. In the last three months, the RBI has imposed a penalty of Rs 60 crore on 31 public and private sector banks.

In addition to violations of certain aspects of know your customer (KYC) and anti-money laundering (AML) guidelines, other violations include failure to comply with instructions on import of gold coins and not effectively monitoring transactions in customer accounts, the apex bank pointed out.

However, RBI has clarified that its investigation did not throw up any conclusive evidence to prove that the banks were involved in money laundering. “The investigation did not reveal any prima facie evidence of money laundering. However, any conclusive inference in this regard can be drawn only by an end to end investigation of the transactions by tax and enforcement agencies,” it said in the statement.

Following Cobrapost’s exposes, the RBI had ordered investigations into the functioning of all banks. While the first lot of banks – ICICI, HDFC and Axis – were penalised a total Rs 10.5 crore in June, 22 other banks, both public and private, were last month asked to cough-up fines totalling Rs 43 crore.

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