The Reserve Bank of India has imposed monetary penalty on the following 22 banks for violation of its instructions, among other things, on Know Your Customer/Anti Money Laundering. The penalties have been imposed in exercise of powers vested in the Reserve Bank under the provisions of Section 47(A)(1)( c ) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
It may be recalled that the Reserve Bank of India had carried out a scrutiny of books of accounts, internal control, compliance systems and processes of these banks at their offices during April 2013. The scrutiny of these banks revealed violation of certain regulations and instructions issued by the Reserve Bank of India, namely,
- non-adherence to certain aspects of know your customer (KYC) norms and anti money laundering (AML) guidelines like customer identification procedure, risk categorisation, periodical review of risk profiling of account holders, periodical KYC updation;
- non-adherence of KYC for walk in customers including for sale of third party products, omission in filing of cash transaction reports (CTRs) in respect of some cash transactions, sale of gold coins for cash beyond ` 50,000;
- non-adherence to instructions on monitoring of transactions in customer accounts;
- non-adherence to instructions on classification of accounts as ‘in-operative’/dormant and lapses in monitoring of transactions in dormant accounts;
- non-adherence to instructions which prohibits acceptance of cash above ` 50,000 from customers for sale of gold coins and issue of Demand Drafts, etc.;
- non-adherence to instructions on the upper limit for remittances under Liberalised Remittance Scheme, upper limit for repatriation of funds from non resident ordinary (NRO) accounts;
- non-adherence to instructions on import of gold on consignment basis.
The investigation did not reveal any prima facie evidence of money laundering. However, any conclusive inference in this regard can be drawn only by an end to end investigation of the transactions by tax and enforcement agencies.
RBI press release link: click here