Regional rural banks (RRBs), state co-operative banks (SCBs) and district central co-operative banks (DCCBs) would be penalised if they fail to implement know your customer (KYC), anti-money laundering (AML) and combat financing of terrorism (CFT) guidelines.
State-run National Bank for Agriculture and Rural Development (Nabard) said during its inspection it found many banks lack implementation of these guidelines, while some are yet to formulate a policy on this regard.
A Nabard official told Business Standard: “Our bank, as a supervisor of SCBs, CCBs and RRBs, was involved in monitoring, sensitising and imparting training to the client banks on KYC and AML guidelines. However, during the course of our statutory inspections, it was observed that even after more than six years since the Prevention of Money Laundering Act came into effect in 2005 and despite various initiatives by Nabard, many such banks failed to implement the guidelines”.
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