Case Brief
The Reserve Bank of India imposed monetary penalties on six banks—Allahabad Bank, Bank of Maharashtra, Corporation Bank, Dena Bank, IDBI Bank Ltd. and Indian Bank—under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The action followed scrutiny of their books of accounts, internal control, compliance systems and processes at their offices during April and May 2013. RBI said the scrutiny revealed violations of its instructions on KYC and AML, including deficiencies in customer identification procedures, risk categorisation, periodic review of risk profiling and KYC updation, non-adherence to KYC norms for walk-in customers, omission in filing CTRs, and gaps in monitoring transactions in customer accounts. RBI noted that no prima facie evidence of money laundering was found, though some violations were substantiated and warranted penalty. IndusInd Bank Ltd. was also scrutinised, but RBI decided not to impose a penalty and to issue only a cautionary letter. The penalties ranged from Rs 50,000 to Rs 2,00,000 per bank.
Action Snapshot
- Primary Impact
- Fine: Rs 50,000
- Entity Type
- Bank
- Action Type