While issues of fines and penalties to UCBs are regular news, for a change the Reserve Bank of India has imposed a monetary penalty of Rs 25 lakh on a PSU Bank namely Andhra Bank.
The PSU Bank was faulted 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.
Based on a complaint, an examination of current accounts opened by two entities in Andhra Bank was carried out and it was observed that the bank had failed to comply with certain provisions of directions issued by RBI on KYC Norms/ AML Standards and Opening of Current Accounts.
Based on the findings, a Notice was issued to the bank to show cause as to why penalty should not be imposed for non-compliance with the directions. After considering the reply received from the bank and submissions made during the personal hearing, RBI concluded that the aforesaid charges of non-compliance with RBI directions were sustained and warranted imposition of monetary penalty.