The Reserve Bank of India has imposed monetary penalty on 13 Banks for violation of regulatory directions / instructions / guidelines, among other things, on KYC norms. The findings of RBI revealed weaknesses in the internal control systems, management oversight and violation of certain regulatory guidelines issued by the RBI as detailed below:

• non-adherence to KYC requirements like customer identification and risk categorization
• non-adherence to the Reserve Bank’s instructions on monitoring of transactions in customer accounts and prompt filing of STRs
• non-adherence to the directions / guidelines issued under FEMA provisions

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