The Reserve Bank of India has imposed a monetary penalty of Rupees fifteen lakh on Sri Ganesh Co-operative Bank based in Gulbarga in the state of Karnataka. RBI has faulted the bank on account of violation of several of the banking norms.
Sri Ganesh Co-operative has also got opened benami accounts and allowed huge cash deposits in such accounts. Though it is yet not confirmed in the case of Sri Ganesh Co-operative bank but readers would recall that intelligence Agencies of the country have been warning of terror module attempts to use the urban co-op banks for their nefarious design.
Also, a press release by the apex bank stated that the UCB violated on Know Your Customers (KYC) and Anti Money Laundering (AML) Guidelines in issuing ‘at par cheques’ to large number of walk-in-customers by intentionally structuring them below Rs 50,000.
The Reserve Bank of India had issued a Show Cause Notice to the bank, in response to which the bank submitted a written reply. After considering the facts of the case and bank’s reply in the matter, the Reserve Bank came to the conclusion that the violations were established beyond doubt and warranted imposition of the penalty.