About 22 banks were penalized by the RBI for money laundering and violation of know your customer (KYC) norms. Banks will have to pay crores of Rupees as part of fines. The central bank announced the decision after checking the banks' accounts, internal processes, control and compliance systems.
Included in the penalized list are State Bank of India, which has been fined Rs3 crores and Punjab National Bank, told to pay Rs2.5 crore. The RBI's official statement noted that the banks were fined for 'violation of its instructions.'
Other penalized banks include Deutsche Bank, Yes Bank, Central Bank of India, Canara Bank, Indian Overseas Bank, Andhra Bank, Bank of India, Bank of Baroda, Vijaya Bank and Ratnakar Bank.
According to the RBI, “the Reserve Bank issued a show cause notice to each of these banks based on the findings of the scrutiny, in response to which the individual banks submitted written replies.
Also, RBI has taken up measures to tighten liquidity in the banking system. In response to the announcement, bank stocks fell as raising short-term funds is now costlier for banks and financial institutions.