The Reserve Bank today imposed a monetary penalty on Axis Bank, HDFC Bank and ICICI Bank for violating Reserve Bank of India instructions. Axis Bank has been fined Rs 5 crores, while HDFC Bank has been fined Rs 4.5 crore and ICICI Bank Rs 1 crore.
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 three banks at their corporate offices and some branches during March / April 2013 to investigate into the allegations of contravention of KYC/AML guidelines against them. The scrutiny of these three banks revealed violation of certain regulations and instructions issued by Reserve Bank of India, namely:
• non-observance of certain safeguards in respect of arrangement of "at par" payment of cheques drawn by cooperative banks
• non-adherence to certain aspects of know your customer (KYC) norms and anti money laundering (AML) guidelines like risk categorisation and periodical review of risk profiling of account holders,
• 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 Rs. 50000,
• not-obtaining of permanent account number (PAN) card details or form 60/61 as required,
• non-verification of source of funds credited to a few non-resident ordinary (NRO) accounts,
• failure to re-designate a few accounts as NRO accounts though required, non-submission of proper information called for by the reserve Bank, etc.
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.