The Reserve Bank of India has penalised the Bihar Awami Co-operative Bank for violation of directions on KYC and guidelines related to exchange of demonetised notes.
In November 2016, the Indian government demonetised the then prevailing Rs 500 and Rs 1,000 notes. As a result, RBI had issued guidelines along with a timeframe for exchange of such currency notes.
In a release, the RBI said it has imposed a penalty of USD 6,634.46 (Rs 5 lakh) on The Bihar Awami Co-operative Bank for violation of the Know Your Customer processes and guidelines in the matter of exchange of Specified Bank Notes, issued by the Reserve Bank of India, according to Economic Indian Times.
Furthermore, the RBI said the penalty is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
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