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RBI imposed monetary penalty on ICICI and Bank of Baroda for violating KYC/AML Instructions

Dec 18, 2014 09:09 IST

The Reserve Bank of India on 17 December 2014 imposed monetary penalty on ICICI bank and Bank of Baroda for violation of its instructions regarding norms on Know Your Customer (KYC) and Anti Money Laundering (AML).

Penalty details of the two banks




5 million rupees

Bank of Baroda

2.50 million rupees

RBI imposed the penalties on these organizations in exercise of powers vested under the provisions of Section 47(A)(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.

Apart from this, RBI also cautioned State Bank of India, Axis Bank and State Bank of Patiala for violating KYC or AML instructions.

RBI took the action on the basis of a complaint from a statutory organization in August 2013 through which details of a fraud committed in these five banks, namely, State Bank of India, ICICI Bank Ltd., Bank of Baroda, Axis Bank Ltd. and State Bank of Patiala, with the participation of certain officials of the statutory organization were brought to the Reserve Bank’s notice.

The complaint mentioned that fraudsters managed to open fictitious accounts in the name of the statutory organisation in the above five banks and operated the accounts mainly for encashing cheques/demand drafts/postal orders of which they were not the rightful owners, for periods ranging from one month to two years, without being detected by the banks.

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