RBI's big action, imposed huge fine on these three banks!
RBI has taken a big action on Kotak mahindra bank, IDFC bank and punjab National bank and imposed a huge fine on them. RBI said that they had to take this step due to some flaws in regulatory compliance. In a statement issued by the central bank, it has been said that apart from the guidelines on the loan system for loan distribution, a penalty of Rs 61.4 lakh has been imposed for not following some guidelines on loans and advances, statutory and other restrictions. In another statement, RBI said that a fine of Rs 38.6 lakh has been imposed on IDFC bank for not following some guidelines of KYC (Know Your Customer).
RBI's action
Apart from this, a penalty of Rs 29.6 lakh has been imposed on punjab National bank by the central bank. This has been done due to non-compliance of the instructions issued by RBI on customer service in banks.
In all three cases, the central bank said that these penalties have been imposed due to deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.
RBI instructions on deposits, accounts
The RBI on Thursday said that banks can open/close rupee accounts (interest-free) in the name of their foreign branches or correspondents without informing the central bank. However, the apex bank said in the 'Master' instruction issued on deposits and accounts that opening rupee accounts in the name of branches of Pakistani banks operating outside Pakistan will require special approval of the RBI.
It further said that deposit in a non-resident bank account is an approved mode of payment to non-residents. Therefore, it is subject to the rules applicable to transfer in foreign currency. RBI said that withdrawal from a non-resident bank account is actually a remittance of foreign currency.
On funding of accounts of overseas banks, RBI said that banks may freely purchase foreign currency from their overseas correspondents/branches at current market rates for holding funds in their accounts to meet their actual needs in India. However, transactions in the accounts should be closely monitored to ensure that foreign banks do not adopt a speculative approach against the indian rupee. Any such cases should be reported to the Reserve Bank.
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