 "SPOT-RBI fines Dhanlaxmi Bank for flouting KYC norms")
The Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on Dhanlaxmi Bank for not adhering to Know Your Customer (KYC) and anti-money laundering (AML) guidelines. The regulator said the penalty had been imposed after taking into account the violation of the instructions, directions and guidelines laid down by RBI.
“This action 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 and its customers,” RBI said.
The regulator added it had earlier issued a show-cause notice to the bank for not having complied with the norms with respect to an investigation conducted by the Economic Offences Wing (EOW) in Mumbai regarding a current account.
Last year, the EOW had started investigating a fixed deposit scam where it was believed that some bank officials had helped some outsiders make use of the bank’s overdraft facility to siphon off funds. In this regard it had also arrested some former employees of of the bank. It was believed that several other banks were involved in the scam.
RBI said after considering the bank’s reply it had come to the conclusion that the lender had violated the instructions.
Earlier this year, the central bank had also slapped a penalty of Rs 1.5 crore on three public sector banks — Bank of Maharashtra, Dena Bank and Oriental Bank of Commerce — for violating KYC/AML rules.
It had also asked eight other public sector banks — Bank of India, Punjab National Bank, State Bank of Bikaner & Jaipur, Union Bank of India, Central Bank of India, UCO Bank, Vijaya Bank and Punjab & Sindh Bank — to ensure strict compliance with KYC rules.
