New Delhi (India), 8th April 2023: On April 6, the Reserve Bank of India (RBI) fined Indian Bank Rs 55 lakh for failing to follow some guidelines in the Reserve Bank of India (Know Your Customer) Directions, 2016.
The central bank stated in a press statement that this action is based on the regulatory compliance shortcomings seen and does not reflect on the legality of any transaction or agreement entered into by the bank with its clients.
According to RBI, “A scrutiny of the bank was carried out by RBI in July 2020 based on a high-value fraud reported by the bank. The examination of the scrutiny report and all related correspondence pertaining to the same, revealed, inter alia, non-compliance with the aforesaid directions by the bank to the extent the bank failed to undertake customer due diligence measures as mandated while opening an account in the name of a sole proprietary firm.”
In addition, the bank received a notice instructing it to provide justification as to why a fine should not be levied against it for failing to follow the stated orders, according to the apex bank.
This penalty has been imposed in the exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and 51 (1) of the Banking Regulation Act, 1949, RBI added.
