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Updated: May 7, 2013 00:01 IST

It is only KYC norm violation, says RBI

Special Correspondent
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K.C. Chakraborty
The Hindu K.C. Chakraborty

Reserve Bank of India (RBI) Deputy Governor K.C. Chakrabarty, on Monday, refuted money laundering charges levelled against various banks, and said that all exposures by Cobrapost.com were connected to know-your-customer (KYC) norms.

“We are seeing how the banks are following up on the KYC norms. There are certain differences in the manner of reporting of KYC norms in each bank…Need to strengthen KYC guidelines,” he said.

In March this year, in another sting operation, Cobrapost.com claimed that officials at HDFC Bank, ICICI Bank and Axis Bank had allegedly indulged in money-laundering practices.

Dr. Chakrabarty, however, had said that there was no ‘money-laundering’ practice involved in the Cobrapost-exposure conducted on three leading private banks.

“No scam has happened,” he had said after a meeting with select bankers in March.

Just as he downplayed the issues two months ago, Dr. Chakrabarty reiterated on Monday that these irregularities were also connected only to KYC norm violations.

Federal Bank in a statement said “As a responsible bank, we conduct our business with strict adherence to extant regulatory guidelines, including specific focus on know your customer, and anti-money laundering (AML) norms….The bank has initiated investigations into the matter.”

Internal enquiry

DCB Bank’s spokesperson said, “We are reviewing the contents, and making our internal enquiries. The bank does not allow or accept any breach of rules and regulations including those related to KYC, AML and CFT (Anti-Money Laundering and Countering Financing of Terrorism), etc. We have a very clear code of conduct and values that is reiterated to employees from time to time.”

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I wonder how the RBI Deputy Governor K.C. Chakrabarty can take such a benign stance on the exposes done by Cobrapost. At the very least, one would have expected an institution like the RBI to come down heavily on the Banks and penalise them.
For the senior leaders of the central bank of a country to shrug aside black money and parallel economy is totally shameless. What is the point of having a monetary policy in place when there is a parallel economy that is following its own rules?
I hope the international associations take note of the lack of stringent action by the RBI and apply heavy pressure to rectify these systems.

from:  MN Raju
Posted on: May 7, 2013 at 11:12 IST

It seems that RBI Deputy Governor K.C. Chakrabarty is working for
banking corporation instead of RBI. By saying it's only a KYC norm
violations, don't he think that those who are violated KYC norms are
punishable under law. Every time we hear reply that we will strengthen
KYC norms but what will happen to those parties who are violating the
norms repeatedly? He is jumping the gun too early to support the banks
but public are utterly disappointed with his reply and it's
disgusting. whoever concerned, Pls remove this guy from RBI post
first. This is the second time, he is talking like this.

from:  john
Posted on: May 7, 2013 at 08:41 IST
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