RBI slaps penalty on ICICI,Axis,HDFC Bank

‘Violation of some rules found but no evidence of money laundering’

Written by ENS Economic Bureau | Mumbai | Published: June 11, 2013 4:36 am

The Reserve Bank of India,which investigated the books of three top private banks following allegations of money laundering and violation of several RBI provisions,has slapped a penalty of Rs 5 crore on Axis Bank,Rs 4.50 crore on HDFC Bank and Rs one crore on ICICI Bank for various lapses.

However,the RBI said the investigation did not reveal any prima facie evidence of money laundering.

“Any conclusive inference in this regard can be drawn only by an end-to-end investigation of the transactions by tax and enforcement agencies,” it said in a statement.

The RBI’s scrutinies were initiated after Cobrapost.com,on the basis of its sting operations across some branches of these banks,alleged money laundering and violation of several provisions of the RBI Regulations and the Foreign Exchange Management Act guidelines.

“A similar scrutiny was also conducted at the corporate offices of 36 other banks during April and May 2013. The process of follow up action in respect of these banks is at different stages of its completion,” it said.

The RBI went through the books of accounts,internal control,compliance systems and processes of three private 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,” the RBI said.

The major violations include 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 KYC norms and anti money laundering 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 in respect of some cash transactions and sale of gold coins for cash beyond Rs 50,000,the RBI said.

The other violations listed by the RBI are: not-obtaining of PAN card details or form 60/61 as required,non-verification of source of funds credited to a few non-resident ordinary accounts and failure to re-designate a few accounts as NRO accounts though required and non-submission of proper information called for by the Reserve Bank.

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.

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