Mumbai: The Reserve Bank of India (RBI) on Monday penalized Axis BankLtd, HDFC Bank Ltd and ICICI Bank Ltd after employees of the three private-sector lenders were caught in a video-taped sting operation purportedly advising a bogus client—a reporter for the website Cobrapost.com posing as a politician’s aide—on how to legitimize unaccounted money.
The central bank said its investigation “did not reveal any prima facie evidence of money laundering,” but cautioned 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.”
RBI penalized Axis Bank Rs.5 crore, HDFC Bank Rs.4.5 crore and ICICI Bank Rs.1 crore.
An independent investigation by RBI on these banks’ branches and headquarters found “violation of certain regulations and instructions issued by Reserve Bank of India,” RBI said.
The violations were related to 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 categorization and periodical review of risk profiling of account holders,
It found non-adherence of KYC norms for walk-in customers including for sale of third-party products, omissions in filing of cash transaction reports (CTRs) in respect of some cash transactions, sale of gold coins for cash beyond Rs.50,000 and not obtaining permanent account number (PAN) card details as required,
A similar scrutiny was also conducted at the corporate offices of 36 other banks during April and May 2013, RBI said, adding that follow-up action in respect of these banks is at different stages of completion