The Reserve Bank of India imposed penalties on 22 banks for violating rules for customer identification and anti-money laundering, ranging from Rs 50 lakh to around Rs 3 crore, it said on Monday.
RBI has imposed a total fine of Rs 49.5 crore, including SBI, PNB, Yes Bank, Kotak Mahindra, Canara Bank and Bank of India, while it has issued cautionary letters to Citibank, Stanchart, RBS, BNP Paribas, Tokyo Mitsubishi, Barclays and State Bank of Patiala.
SBI was fined Rs 3 crore by the central bank, according to an RBI release.
Among private sector lenders, RBI found violations of regulatory instructions (in terms of KYC and ALM) in Yes Bank (fined Rs 2 crore), Kotak Mahindra Bank (Rs 1.5 crore), ING Vysya Bank (Rs 1.50), Federal Bank (Rs 3 crore), Development Credit Bank or DCB (Rs 1 crore), Dhanlaxmi Bank (Rs 2 crore), Lakshmi Vilas Bank (Rs 2.50 crore) and Jammu & Kashmir Bank (Rs 2.5.)
South-based public sector lenders including Canara Bank , Andhra Bank and Vijaya Bank will have to shell out to the tune Rs 3 crore, Rs 2.5 crore and Rs 2 crore respectively.
North-based Punjab National Bank and Punjab & Sind Bank have to pay a fine of Rs 2.50 crore each. Oriental Bank of Commerce (OBC) will pay a sum of 2 crore. Kolkata-based United Bank of India UBI is also to pay Rs 2.50 crore.
Deutsche Bank AG is the only foreign lender to have appeared in the list of 22 banks. It will have to share Rs 1 crore with the central bank as fine.
The RBI had carried out a study of books of accounts and compliance systems of banks in April 2013 which revealed many didn’t adhere to know-your-customer rules, including those related to cash transactions, sale of gold coins and import of gold coins on consignment basis.
The RBI also issued cautionary letters to seven other banks without imposing any monetary penalty after it was satisfied with their written or oral submissions.
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.
“In respect of seven other banks, where such scrutinies have been conducted and banks’ explanation called for, the banks’ written or oral submissions were found to be satisfactory or no violation of serious nature has been established. It has, therefore, been decided not to impose any monetary penalty but to issue only suitable cautionary letters,” RBI said in a release.
Following probe into charges levelled by an online portal Cobrapost, RBI has earlier imposed fines totalling Rs 10.5 crore on top three private lenders – Axis Bank, HDFC Bank and ICICI Bank.
Although the investigation did not reveal any prima facie evidence of money laundering, RBI said that “any conclusive inference in this regard can be drawn only by an end-to-end investigation of the transactions by tax and enforcement agencies”.
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