Financial Intelligence Unit Cracks Down on Co-operative Banks

The banks can go for an appeal against the order within 45 days from the date on which the order is received.

Published: 16th April 2016 02:52 AM  |   Last Updated: 16th April 2016 02:52 AM   |  A+A-

NEW DELHI: The Financial Intelligence Unit of India (FIU-IND) has cracked the whip on co-operative banks failing to file Cash Transaction Reports (CTRs).

The agency responsible for safeguarding the financial system from money laundering, terrorism etc recently issued an order against Mahamedha Urban Co-Operative Bank and Mahila Vikas Co-operative Bank Ltd under sections of Prevention of Money Laundering Act (PMLA) and imposed heavy penalty.

As per PMLA rules, banks need to furnish details of cash transactions worth over Rs 10 lakh, suspicious transactions, counterfeit currency transactions and non-profit organisations’ transactions to the FIU. In his order against Mahila Vikas Co-operative Bank Ltd, P K Tiwari, Director FIU said the bank failed to file CTRs from March 2006 to March 2008. A delay was also found between 2008 and 2010.

Tiwari said, the Bank had not given any convincing reason for not filing reports on 229 transactions in 2011-12 and 87 transactions in 2012-13. The agency has imposed a fine of Rs 79.60.

The banks can go for an appeal against the order within 45 days from the date on which the order is received.

“I impose a fine of Rs 48 lakh on Mahila Vikas Co-operative Bank Ltd for failing to have in place an internal mechanism for reporting prescribed transactions during the period between March 2006 and March 2010. I also impose a fine of Rs 31.60 lakh for not filing reports for 229 transactions in 2011-12 and 87 transactions 2012-13,”

FIU Director Tiwari said in his order.  The FIU has slapped a fine of Rs 97 lakh on Mahamedha Urban Co-Operative Bank and Rs 6 lakh on its CEO for non-compliance.

The order said the bank did not file any cash transaction report for 40 months from March 2006 to March 2013 and January 2013 to April 2013.

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