Regulatory Guidelines

Regulatory Guidelines

BE/RBI NOTE/7/2018

It is very clear that RBI guidelines in respect of KYC norms, money laundering activities and currency chest management, including detection and impounding of counterfeit notes is very very important.

It may be noted that Counterfeit notes under circulation is a menace in the economy which requires severe punishment.  Not bringing the facts related to such notes is a criminal offence and hence, more caution is required to be exercised in disposal of such notes and due diligence be followed, as per Reserve Bank of India guidelines.

The following note by RBI reveals, as to how important is, the regulatory guidelines and more and more caution is required to be exercised in dealing with such cases.

State Bank of India (SBI) has been hit with a monetary penalty of Rs 40 lakh for violating RBI rules on Detection and Impounding of Counterfeit Notes.

“The Reserve Bank of India (RBI) has imposed, on March 01, 2018, a monetary penalty of Rs 4 million (Rs 40 lakh) on State Bank of India (the bank)…This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” RBI said in a statement on its website.

Giving the background for the penalty, the banking regulator said that the currency chest inspection of two branches of SBI revealed, inter alia, violation of the instructions issued by RBI on Detection and Impounding of Counterfeit Notes.

“Based on the inspection report and other relevant documents, a Notice, dated January 05, 2018, was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI. After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions/ guidelines were substantiated and warranted imposition of monetary penalty,” RBI added.

This comes two days after the central bank penalised Indian Overseas Bank (Rs 2 crore) and Axis Bank (Rs 3 crore) for breaching KYC (know your customer) norms and asset classification (NPA) guidelines, respectively….. 🙂


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