A recent press report said that the RBI has penalised 48 small banks in just six months, for lapses in implementing customer identification norms and various other violations.
The RBI has imposed fine on 48 banks (mostly co-operative) in the first six months of 2011 where as only 15 such actions were taken during 2010. It has so far imposed penalties between Rs 1 lakh and Rs 5 lakh on 48 banks during January-June period.
The Government has adopted a multi-pronged strategy including setting up of special panels and review of tax treaties with different countries, to curb black money menace.
Mr. D. K Joshi, Principal Economist, Crisil said that the small banks were found violating guidelines issued by the RBI on Know Your Customers (KYC) norms and Anti-Money Laundering (AML) standards. He said that the RBI has taken right steps as carelessness on KYC norms is a serious matter and compromises transparency.
Mr. Jagannadham Thunuguntla, SMC Global securities Head of Research, said that smaller banks cannot afford to spend a lot on IT infrastructure and this could be a reason for their failure to follow various guidelines issued by the RBI.
The banks are already facing the heat of the hike in the base rates by the regulator which has lead to the slowdown in their loan business. The hike in base rates has made it mandatory for all banks to increase their loan rates (home loan, personal loan, business loans, car loan etc.)