RBI fines 11 state co-op banks in last 40 days

AHMEDABAD: A small but increasing number of co-operative banks in the state are indulging in a risky game. Reserve Bank of India (RBI) has cracked the whip on several such Gujarat co-operative banks in the last few days. Only this year, between January 24 and March 4, 11 state co-operative banks have been penalized by imposing of fines between Rs 1 lakh and Rs 5 lakh for flouting RBI`s know your customer (KYC) and anti-money laundering (AML) guidelines.  Cooperative banks have been often accused of allowing a person or company to open several accounts in their banks` transactions which are not monitored. RBI had in 2002 have made it mandatory for banks to share monthly details of all accounts where cash transaction of more than Rs 10 lakh has taken place with Financial Intelligene Unit (FIU), India. But on several occasions, state co-operative banks have fallen short of complying with the RBI guidelines.   However, co-operative bank officials said that there is not much to read in the RBI`s strict stand as mistakes by the
co-operative banks were done out of ignorance. "The bank officials some times forget to send the details on time and also not many are aware of the AML and KYC norms, and find themselves on the wrong side without any malafide intention," said Jyotindra Mehta, chairman of Gujarat Urban Co-operative Banks Federation (GUCBF).   RBI has issued show cause notices to all the 11 co-operative banks and after considering the facts, all of them were found flouting the norms and were penalized.