BackRBI fines 22 banks `49.5 cr over money laundering, KYC norms
A penalty of `3 crore each for SBI, Canara Bank, Bank of Baroda, among others
Premium(Hemant Mishra/Mint)
Mumbai: The Reserve Bank of India (RBI) on Monday imposed a total fine of ₹ 49.5 crore on 22 banks for violating anti-money laundering and know-your-customer rules.
State Bank of India, the country’s largest lender, has to pay a penalty of ₹ 3 crore for the infractions. The other banks that will each have to pay the same amount, the maximum imposed on a particular lender, include The Federal Bank Ltd, Indian Overseas Bank, Canara Bank, Bank of Baroda, Central Bank of India and Bank of India.
The fines imposed by the central bank come after an internal investigation following an expose by online magazine Cobrapost, which used hidden cameras to videotape bank employees advising clients on ways to legitimize unaccounted money.
“Based on the findings of the scrutiny, the Reserve Bank issued a show-cause notice to each of these banks, in response to which the individual banks submitted written replies. After considering the facts of each case and individual bank’s reply, as also personal submissions, information submitted and documents furnished, the Reserve Bank came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty," the central bank said on Monday.
RBI on 10 June penalized three private sector banks for violating norms—Axis Bank Ltd ( ₹ 5 crore), HDFC Bank Ltd ( ₹ 4.5 crore) and ICICI Bank Ltd ( ₹ 1 crore).
Other banks penalized on Monday include Andhra Bank, Deustche Bank AG, Development Credit Bank Ltd, Dhanlaxmi Bank Ltd, ING Vysya Bank Ltd, Jammu and Kashmir Bank Ltd, Kotak Mahindra Bank Ltd, Oriental Bank of Commerce, Punjab and Sind Bank, Punjab National Bank, Lakshmi Vilas Bank Ltd, Ratnakar Bank Ltd, United Bank of India, Vijaya Bank and Yes Bank Ltd.
Seven other banks, which were also scrutinized for violations and called for explanations, were let off after a warning.
“The banks’ written or oral submissions were found to be satisfactory or no violation of serious nature has been established," RBI said. “It has, therefore, been decided not to impose any monetary penalty (on these banks) but to issue only suitable cautionary letters."
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