The Reserve bank of India (RBI) has penalised a number of banks—both government-run and private—in the last three years for violating its guidelines.
The alleged violations include “non-adherence of know-your-customer (KYC) norms, failure of internal controls in initial public offerings, violation of foreign exchange management guidelines and non-maintenance of prescribed cash reserve ratio (CRR) and statutory liquidity ratio (SLR)”, finance minister Pranab Mukherjee informed the Lok Sabha in a written reply.
Bank of Baroda, ICICI Bank, State Bank of Bikaner & Jaipur, Centurion Bank of Panjab, Dena Bank, Bank of India, Deutsche Bank, Yes Bank, Vijaya Bank, ING Vysya Bank, SBI Commercial and International Ltd and ABN Amro Bank have been warned by the central bank.
KYC norms stipulate the due diligence that has to be carried out by banks and financial institutions before doing business with a client. SLR is the amount that banks have to maintain in cash or in the form of gold or approved securities while CRR is the minimum reserves banks have to hold.
The country’s second-largest lender ICICI was warned in April last year for alleged irregular dealings in securities in Hong Kong. The RBI issued an advisory note to the bank in 2007 for alleged violations related to opening of deposit accounts, the reply said.
Mr Mukherjee also informed that a penal interest of over Rs 1 crore was imposed on ING Vysya Bank and Vijaya Bank for alleged default in maintaining CRR.
