Reserve Bank of India imposes monetary penalty on Andhra Bank
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 25 lakh on Andhra Bank by order dated December 05, 2019. RBI concluded that the bank had not complied with certain provisions of its directions on KYC Norms / AML Standards and Opening of Current Accounts. The action was taken under the Banking Regulation Act, 1949, after a complaint-led examination, issuance of a show-cause notice, consideration of the bank’s reply, and a personal hearing.
RBI imposed a monetary penalty on Andhra Bank under section 47A(1)(c) read with section 46(4)(i) and section 51(1) of the Banking Regulation Act, 1949. The bank was found to have failed to comply with certain provisions of RBI directions on Know Your Customer (KYC) Norms / Anti Money Laundering (AML) Standards and Opening of Current Accounts, based on an examination triggered by a complaint and subsequent show-cause process.
Severity Assessment
The action is a monetary penalty of Rs 25 lakh, which falls above Rs 20 lakh and therefore carries severity 4.
Andhra Bank is liable to pay the monetary penalty, but the press release does not indicate any operational restriction or suspension. The finding is limited to regulatory non-compliance and does not pronounce on the validity of customer transactions or agreements.
Published as Andhra Bank
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