RBI imposes Monetary Penalty of INR2,00,00,000 on Indian Overseas Bank

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           Reserve Bank of India vide Press Release on Mar 5, 2018 that it has imposed a 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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