Feb 12 2019, 1:54 PMFeb 12 2019, 2:05 PMFebruary 12 2019, 1:54 PMFebruary 12 2019, 2:05 PMThe Reserve Bank of India has penalised five banks for not adhering to its guidelines on monitoring end use of funds by its borrowers, exchanging information with other banks, classification and reporting of frauds and restructuring of accounts.Penalties of Rs 1.5 crore each have been levied on Allahabad Bank, Bank of Maharashtra and Indian Overseas Bank, according to a statement on the central bank’s website. Andhra Bank was served with a penalty of Rs 1 crore, it said.In a stock exchange notification, Oriental Bank of Commerce said that it has also received a notice from the RBI regarding a penalty of Rs 1.5 crore for similar charges.Last week, India’s largest lender State Bank of India said that it had received a penalty of Rs 1 crore for not adhering to RBI guidelines on monitoring end use of funds with respect to one of its borrowers.The RBI prescribes strict rules regarding the use of loan proceeds by borrowers. It has time and again asked banks to monitor this end use closely to ensure there is no diversion of funds. A failure to do so on the part of these banks appears to have resulted in these penalties.Separately, the regulator said that it has also levied penalties worth Rs 20 lakh each on HDFC Bank Ltd., IDBI Bank Ltd. and Kotak Mahindra Bank Ltd. for non-compliance with know your customer norms and anti-money laundering standards.The charges are being imposed on banks by the enforcement division of the regulator, which looks into cases where banks have failed to adhere to RBI rules. As part of the process, banks are sent a show-cause notice and given an opportunity to defend themselves. A failure to present a reasonable defense results in a penalty being imposed.