In the wake of alleged violation of KYC norms by a large number of banks, the government and RBI are looking at the possibility of hiking the penalty which can be imposed on the erring banks.
“The maximum penalty under the law is Rs 1 crore now and that is very less. There is active discussion now on increasing limit of penalty. So that is something which is under consideration,” Banking Secretary Rajiv Takru told reporters here today at the sidelines of lIC Board meeting.
“As a matter of fact, this (hike of penalty) was discussed at the RBI board and a point was made that the penalty amount is probably less,” he added.
The regulator has sent show-cause notices to the erring banks and is awaiting their replies to take appropriate corrective measures, Takru said. However, he did not specify how much should be the quantum of increase.
Referring to the Cobrapost expose and the punitive actions being planned on erring banks, Takru said the RBI had already issued show-cause notices to the banks after which it would take action.