The Reserve Bank of India has put some 480 urban cooperative banks under its scanner for alleged violation of anti-money laundering laws. The central bank may take strict action including levy of penalty and denial of branch expansion against those found guilty. It has already issued instructions to its regional offices to undertake scrutiny of these banks to ascertain compliance of KYC, Anti-Money Laundering and Combating the Financing of Terrorism (CFT) guidelines. Cooperative banks are controlled by the central as well as state governments and there have been allegations of misuse of these banks for money laundering. RBI has also been coordinating with the state governments on the issue and advised strict action against the defaulting UCBs. The central bank has also issued guidelines to block accounts of all non complying customers.
