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RBI fined 22 banks for violating KYC and Anti-Money Laundering Norms

RBI on 15 July 2013 imposed fines of around 49.5 crore on 22 private and public sector banks for violating KYC/anti-money laundering norms.

Jul 15, 2013 15:40 IST
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Reserve Bank of India (RBI)The Reserve Bank of India (RBI) on 15 July 2013 imposed fines of around 49.5 crore on 22 private and public sector banks including SBI, PNB and Yes Bank for violating KYC/anti-money laundering norms.

The bank also had given cautionary letters to seven banks which includes Citibank and Stanchart,Barclays Bank, BNP Paribas, Royal Bank of Scotland, Bank of Tokyo Mitsubishi and State Bank of Patiala following an expose made by an online portal.

The penalty on 22 banks follows scrutiny carried out by RBI of books of accounts, internal control, compliance systems and processes of these banks at their corporate offices and some branches during April 2013.

The scrutiny was conducted to probe allegations of contravention of Know Your Customer (KYC)/anti—money laundering guidelines against them following the expose.
 
Important points with respect to the imposition of Fine

• SBI along with Bank of India, Canara Bank, Bank of Baroda, Central Bank of India, Indian Overseas Bank and Federal Bank  has been imposed with a penalty of 3 Crore Rupees.
• The United Bank of India, Lakshmi Vilas Bank, Punjab National Bank, Jammu & Kashmir Bank and Andhra Bank were slapped a penalty of Rs. 2.5 crore each.
• While, a penalty of 2 crore Rupees each was imposed on Yes Bank, Vijaya Bank, Oriental Bank of Commerce and Dhanlaxmi Bank.
• The other banks which were penalised by the RBI include Deutsche Bank, Development Credit Bank, ING Vysya Bank, Kotak Mahindra Bank and Ratnakar Bank.

It is worth mentioning here that following probe into charges levelled by an online portal Cobrapost, RBI has earlier imposed fines totalling 10.5 crore rupees  on top three private lenders — Axis Bank, HDFC Bank and ICICI Bank.

RBI in its statement regarding the case asserted that any conclusive inference in this regard can be drawn only by an end-to-end investigation of the transactions by tax and enforcement agencies and it has conducted probe into allegations against seven other banks during April and May, 2013 and the follow up action were at different stages.

Reason behind fine being Imposed by RBI on banks


• The bank not adhere to the KYC norms for walk—in customers for sale of third party products and failed to file cash transaction reports in respect of some cash transactions and sale of gold coins for cash beyond 50000 Rupees.
• Non-adherence to instructions on import of gold on consignment basis, limits on remittances under Liberalised Remittance Scheme and repatriation of funds from non-resident ordinary (NRO) account.

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