Bank of Rajasthan penalized by Rs. 25 lakhs for violation of rules
By Vaibhav Aggarwal
Feb 26, 2010
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The Reserve Bank of India has declared having fined Bank of Rajasthan with Rs. 25 lakh for rule violation. The bank was penalized after ‘violation was substantiated and warranted imposition of penalty'.

The penalty was imposed under Section 47 A(1)(b) of the Banking Regulation Act for violation of regulations under Section 35A.

The bank is reported having violated regulations on acquisition of immovable properties, deletion of records in the bank's IT systems, non-adherence to know your customer (KYC) and anti-money laundering guidelines in the opening and conduct of certain accounts.

The Central Bank also reported having found some irregularity on conduct of accounts of a corporate group. Furthermore, the bank failed to provide certain documents sought by the RBI and also misquoted that the documents were unavailable.

The RBI quoted that the action was taken following a show cause notice issued to the bank.

"The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply. Based on the reply, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of penalty. Accordingly, it penalized the bank," RBI said.


There have been cases earlier when RBI has penalized banks on account of misconduct and violation of banking regulations. These banks include HDFC Bank, IDBI Bank, ING Vysya Bank, Citibank, Vijaya Bank, Standard Chartered Bank, Bharat Overseas Bank and Indian Overseas Bank. These banks were penalized on account of violation of KYC norms that resulted in the IPO allotment scam.


The bank also failed to provide certain documents sought by the RBI and misrepresented that such documents were not available.


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