The Reserve Bank of India (RBI) has imposed a penalty of Rs.27 crore on 13 banks, including HDFC Bank, Bank of Baroda and Punjab National Bank, for violating several norms such as those for know your customer (KYC) and anti-money laundering (AML), top central banking sources told The Hindu .
Some of the lenders have informed the stock exchanges about the central bank’s decision.
HDFC Bank – the second largest private sector lender in the country – said RBI had carried out a scrutiny of the transactions related to advance import remittances and had issued a show-cause notice. HDFC Bank was fined Rs.2 crore.
Action plan “The bank has implemented a comprehensive corrective action plan, to strengthen internal controls and mechanisms so as to ensure such incidents do not recur,” HDFC Bank said.
Bank of Baroda faced a penalty of Rs.5 crore after RBI found irregularities related to a Rs.6,100-crore scam that was unearthed last year in some of the bank’s branches in New Delhi.
“Pursuant to the internal audit of the Bank of Baroda, RBI and investigative agencies in October 2015 were advised by the Bank of certain irregularities observed,” Bank of Baroda said.
“The RBI carried out the investigation and noted the deficiencies which were reflective of weaknesses and failures in internal control mechanisms in respect of certain AML provisions such as monitoring of transactions, timely reporting to the Financial Intelligence Unit and assigning of Unique Customer Identification Code to customers,” the bank added. Another public sector lender Delhi-based Punjab National Bank was fined Rs.3 crore. Though the amount of penalty is not material to the size of the bank, reporting is done in terms of SEBI (LODR) Regulations 2015, PNB said.
