The Reserve Bank of India on Thursday imposed a fine of Rs 25 lakh on Andhra Bank for non-compliance with certain provisions of directions issued on Know Your Customer and anti-money laundering.
RBI has, by an order dated Dec. 5, imposed a monetary penalty of Rs 25 lakh on Andhra Bank for non-compliance with certain provisions of directions issued by RBI on KYC norms/Anti Money Laundering standards and opening of current accounts, the central bank said in a release.
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The penalty has been imposed in exercise of powers vested in RBI under the provisions of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI, it said.
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"This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with their customers," RBI said.
Based on a complaint, an examination of current accounts opened by two entities in Andhra Bank was carried out and it was observed that the bank had failed to comply with certain provisions of RBI directions.
Upon findings, a notice was issued to the bank to show cause as to why penalty should not be imposed for non-compliance with the directions, RBI said.
"After considering the reply received from the bank and submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were sustained and warranted imposition of monetary penalty," it further said.
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