RBI fines Tamilnad Mercantile Bank with Rs 5 lakh

Mumbai, Apr 26 (UNI) Reserve Bank of India (RBI) today announced a penalty of Rs five lakh on the Tamilnad Mercantile Bank for violation of the know your customer (KYC) norms as stipulated by the Central bank.

The penalty has been imposed by RBI under section 47A(1)(b) of the Banking Regulation Act, 1949, for violation of regulations in not ensuring end-use of bank's funds lent to various borrowers, which was also facilitated by not ensuring diligent compliance with KYC norms in opening the accounts, a RBI release here said.

Before levying the penalty, RBI had issued a show cause notice to the bank, following which the Tamilnad bank submitted a written reply.

After examining the bank's reply, RBI found that as the violations were conclusively established, the penalty was required, accordingly, the release added.

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