RBI imposes Monetary Penalty of INR2,00,00,000 on Indian Overseas Bank
The monetary penalty is for non-compliance with
the directions issued by RBI on ‘Know Your Customer’ (KYC) norms.
The onetary penalty was necessary as Indian
Overseas Bank had failed to adhere to the aforesaid directions/guidelines
issued by RBI on ‘Know Your Customer’ (KYC) norms.
Reserve Bank of India has clarified that
this penalty is based on deficiencies in regulatory compliance and is not
intended to pronounce upon the validity of any transaction or agreement entered
into by the bank with its customers.
Brief
Background : -
A fraud was detected in one of the branches
of Indian Overseas Bank. The examination of the documents, including the bank’s
internal inspection report, revealed, inter alia, non-compliance with the
directions issued by RBI on Know Your Customer (KYC) norms.
Based on the documents, a Notice was issued
to the bank advising it to show cause as to why penalty should not be imposed
for non-compliance with directions issued by RBI.
After considering the bank’s reply, oral
and written submissions made in the personal hearing, as also the additional
information and documents furnished, RBI came to the conclusion that the
aforesaid charges of non-compliance with RBI directions/ guidelines were
substantiated and warranted imposition of monetary penalty.
Additional
Reading
10
bank
officials arrested in Rs 6-crore fraud case
Former
IOB senior manager among 6 guilty of bank fraud
IOB
Bank manager, four staff held for fraud
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