News

July 03, 2019

RBI Slaps Penalties Of Rs 50 Lakh Each On UCO, Allahabad Bank For Non-Compliance With Know Your Customer Norms


[ By Bobby Anthony ]

The-Reserve-Bank-of-India

The Reserve Bank of India (RBI) has imposed penalties of Rs 50 lakh each on UCO Bank and Allahabad Bank for non-compliance with know your customer (KYC) norms, Anti-Money Laundering (AML) standards and opening of current accounts.

In a recent stock exchange filing, the UCO Bank stated that the RBI had exercised powers conferred under Section 47 (A) (1) (c) read with Section 51 and 46 (4) (1) of the Banking Regulation Act, 1949, and imposed a penalty of Rs 5 million on it.

The penalty was imposed for non-compliance of RBI directives on KYC Norms, AML Standards as well as CFT obligation of banks under the Prevention of Money Laundering Act 2002' and also on Opening of Current Accounts by Banks -Need For Discipline norms.

In a similar exchange filing recently, the Allahabad Bank stated that the RBI has imposed a penalty of Rs 50 lakh on it.

The penalty was imposed for non-compliance with directions issued by RBI on KYC norms and AML Standards as well as Opening of Current Accounts.

Allahabad Bank had reported widening of its net loss to Rs 3,834.07 crore for the March quarter last fiscal, against a net loss of Rs 3,509.63 crore for the same period previous fiscal, due to a rise in provisions to cover bad loans.

However, the UCO Bank had reported narrowing of its net loss to Rs 1,552.02 crore for the March quarter of FY19, against a net loss of Rs 2,134.36 crore for the same period of FY18, with rising operating profits and falling provisions for bad loans. The lender remained hopeful of coming out of the PCA framework by the end of this fiscal.

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