Recent press reports said that the Reserve Bank of India has imposed a monetary penalty of Rupees five lakh on Ahmedabad District Central Co-operative Bank Ltd., Ahmedabad, and Gujarat. The bank has been penalised for the violation of guidelines issued by Reserve Bank of India on Know Your Customers (KYC) norms and Anti Money Laundering (AML) standards.
Reports from the Reserve Bank of India said that the penalisation is in exercise of powers vested in it under the provisions of Section 46 read with Section 47A of the Banking Regulation Act, 1949 (AACS) for violating guidelines issued by Reserve Bank of India on Know Your Customers (KYC) norms and Anti Money Laundering (AML) standards. RBI has made it mandatory for financial institutions to get KYC from customers when giving products like home loan, personal loan and Even savings accounts
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, bank’s reply and personal submission in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.