RBI punishes 7 banks; 4 PSBs, 3 private banks

The Reserve Bank of India (RBI) has ordered a penalty against four public sector banks (PSBs) and three private banks for non-compliance of RBI's guidelines including KYC and monitoring the end-use of funds.

The central bank found that the PSU banks; Allahabad Bank, Andhra Bank, Bank of Maharashtra, Indian Overseas Bank were guilty of non-compliance of RBI guidelines for monitoring of end-use of funds, classification and reporting of frauds, exchange of information with other banks and restructuring of accounts. 

RBI imposed a fine of Rs. 1.5 crore on Allahabad Bank, Bank of Maharashtra, Indian Overseas Bank and Rs. 1 crore on Andhra Bank. This action was under the provisions of Section 47A(1)(c), with Section 46(4)(i) of the Banking Regulation Act, 1949, RBI order dated January 31, 2019.

While the RBI penalised private banks; HDFC Bank, IDBI Bank Limited and Kotak Mahindra Bank Rs. 20 lakh each for non-compliance with rules issued by RBI on Know Your Customer (KYC) norms or Anti-Money Laundering (AML) standards. The order is dated February 4, 2019.

Meanwhile, the market was upbeat with benchmark indices BSE Sensex at 36,206.53, up by 52.91 points or 0.15 per cent Nifty50 was at 10,846.70, up by 15.30 points or 0.14 per cent. The most followed Nifty Bank index was at 27,025.75, up by 15.00 points or 0.06 per cent.