RBI fines Mumbai Bank for money laundering

Mumbai District Co-operative Bank manager said the bank has collected over Rs 200 crore in deposits during the demonetisation drive

Mumbai, Jan 3: The Reserve Bank on Tuesday imposed a Rs one lakh penalty on the Mumbai District Co-operative Bank (Mumbai Bank) for violating know-your-customer and anti-money laundering norms.

"The RBI has imposed a monetary penalty of Rs 1 lakh on Mumbai District Central Co-operative Bank for violating the directives/guidelines/instructions of RBI relating to KYC norms/and AML measures," the central bank said.

The central bank had first issued a showcause notice to the bank and after going through its submissions found that the violations "substantiated and warranted imposition of penalty", it added.

Bank chairman Pravin Darekar, who joined the ruling BJP and has been member of the Maharashtra legislative council, denied that the fine has anything to do with the demonetisation exercise.

He explained that this is a two-year old matter wherein the RBI had first fined the bank Rs 5 lakh for not doing KYC of the office-bearers of 495 housing societies and after explaining our position the fine was reduced to Rs 1 lakh, he said.

Darekar said the bank has collected over Rs 200 crore in deposits during the demonetisation drive and all of it has been accepted by the central bank. He claimed other agencies including the Enforcement Directorate and Nabard have not found any irregularity with the deposits during demonetisation.

PTI