According to a recent press report, the Reserve Bank of India has imposed a monetary penalty of Rs. 5.00 lakh on The Baroda Traders Co-operative Bank Limited, Vadodara, Gujarat, in exercise of powers vested in it under the provisions of Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for non adherence to Know Your Customers (KYC) norms.
The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank had submitted a written reply. After considering the facts of the case and the bank’s replies in the matter, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of the penalty.
The RBI is the central banking institution of the Country and it controls the monetary policy of the rupee. The RBI has recently hiked lending rates by 25 bps which is likely to make all retails loans (home loan, personal loan, car loan etc) and other loans costlier to the borrowers.