The Reserve Bank of India has imposed a monetary penalty Rupees five lakh on the Banaskantha Mercantile Co-operative Bank Ltd based in Palanpur in the district Banaskantha of Gujarat.
The UCB was found violating the directives and guidelines of the Reserve Bank on Know Your Customer (KYC) and Anti Money Laundering (AML)- two important tools for RBI to check unabated growth of black money.
The Reserve Bank of India had issued a Show Cause Notice to the bank based on the finding of inspection done earlier. The UCB submitted a written reply and made personal submission to the Executive Director, RBI, Department of Co-operative Bank Regulation, Central Office, Mumbai.
After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.