RBI has imposed the fine on Krishna Mercantile Co-operative Bank under powers vested in it under the provisions of Section 47A (1)(b) read with section 46(4) of Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) for the violation of the directives/guidelines of the Reserve Bank on implementation of Know Your Customers (KYC)/Anti Money Laundering (AML) norms.
The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply. After considering the facts of the case and the bank’s reply in the matter, the RBI came to the conclusion that the violations were substantiated and warranted imposition of the monetary penalty.
The Reserve Bank has also imposed a monetary penalty of Rs. 1 lakh on another cooperative bank of Madhya Pradesh – the Khargone Nagrik Sahakari Bank Maryadit