The Reserve Bank of India has imposed a monetary penalty of Rs5.00 lakh (Rupees Five lakh only) on the Imperial Urban Co-operative Bank Ltd, Faizabad, Uttar Pradesh, for the following violations:
- Incorrect reporting of information in the Form I relating to CRR/ SLR and incorrect computation of DTL.
- Violation of KYC guidelines i.e., non-preparation of risk profiles of all customers and non-fixing of threshold limit.
- Violation of Prudential Inter-bank (Gross) Exposure Limit and Prudential Inter-bank Counter Party Limit.
Reserve Bank of India, has advised Banks to prepare a profile for each new customer based on risk categorisation.
The customer profile may contain information relating to customer’s identity, social/financial status, nature of business activity, information about his clients’ business and their location etc. The nature and extent of due diligence will depend on the risk perceived by the bank.
However, while preparing customer profile banks should take care to seek only such information from the customer, which is relevant to the risk category and is not intrusive. The customer profile is a confidential document and Reserve Bank of India has made it clear that the details contained therein should not be divulged for cross selling or any other purposes.
Reserve Bank of India, has also indicted to Banks to prescribe threshold limits for a particular category of accounts and pay particular attention to the transactions which exceed these limits. Transactions that involve large amounts of cash inconsistent with the normal and expected activity of the customer should particularly attract the attention of the bank