MUMBAI: Banks involved in the investigation operations could face severe penalties running into crores of rupees as compared to past offences where penalties ranged from Rs 5 lakh to Rs 30 lakh. Higher penalties are a fallout of the amendment to the Banking Regulation Act 1949 and RBI’s decision to treat each breach as a separate incident.
TOI on Tuesday reported the findings of an RBI investigation which unearthed 7,569 transactions worth Rs 4,575 crore that were sealed without permanent account numbers or Form 60. There were instances where a dummy PAN number was issued and in some cases the same PAN numbers were assigned to accounts of multiple individuals. The dummy PAN cards were used in 3,820 cases of high networth individuals in the “high risk category”.
Banks are required to verify PAN against the original card issued. If it emerges that banks do not have copy of the PAN, RBI may construe it that the bank was complicit in evasion. Following this year’s amendments to the Banking Regulation Act, RBI has been authorized to collect penalties amounting to Rs 25 lakh for each offence. This is five times the maximum penalty of Rs 5 lakh that was applicable in earlier offences.
Senior RBI officials said that the banks have been issued show-cause notices asking them to give reasons why penalties should not be imposed. Each case of violation would be treated as a separate case.