RBI penalises two Gujarat-based banks

Mumbai: The Reserve Bank has imposed penalty of Rs 1 lakh each on two Gujarat-based cooperative sector lenders for violation of various rules, including anti-money laundering guidelines.

The two banks are -- the Surat-headquartered Rander People's Co-operative Bank and Vadodara-based Shree MahalaxmiMercantile Co-operative Bank, the apex bank said on Monday.

"The RBI has imposed a monetary penalty of Rs 1 lakh on the Rander People's Co-operative Bank... for certain violation of RBI instructions by non-adherence to Anti-Money Laundering guidelines in regard to submission of reports of cash transactions above Rs 10.00 lakh to Financial Intelligence Unit-India...," it said.

The central bank added that in case of Shree Mahalaxmi Mercantile Co-operative Bank, the penalty has been imposed for violation of operational instructions by sanctioning fresh loans and advances.

The decision to penalise the two banks was reached following issuing of show cause notices to them and consideration of the written replies submitted by the lenders.

RBI's latest announcement comes within days of similar penalties imposed by it on five other cooperative sector banks based in the western state.

Source: Financial Express