The Reserve Bank of India (RBI) has imposed 27 crore rupees penalty on 13 public and private sector banks for violations of Foreign Exchange Management (FEMA) Act (Anti-money laundering) and lapses in Know your customer (KYC) rules. The matter relates to irregularities on the basis of inputs received from a public sector bank, RBI had undertaken a scrutiny on advance import remittances in 21 banks in October and November last year. The scrutiny examined the alleged irregularities in opening and monitoring of accounts including violations under FEMA provisions. Both CBI and the Enforcement Directorate are currently probing the huge remittances to Hong Kong from the bank. The amount was allegedly transferred in the garb of payments for imports that never took place, investigators suspect.
The banks include Bank of Baroda for Rs 5 crore, Punjab National Bank, and Syndicate Bank have been fined Rs 3 crore each. UCO Bank, HDFC Bank, Allahabad Bank, Canara Bank and IndusInd Bank have all been fined Rs 2 crore each. While the regulator did not impose any fine on SBI, ICICI Bank, Axis Bank, Kotak Mahindra Bank and Union Bank of India, among others, it advised these banks to ensure strict compliance of KYC (know your customer) requirements and FEMA provisions on an ongoing basis.
So let’s discuss some questions related to this post:
1. Total how much amount of penalty has been imposed by the RBI on 13 banks recently?
2. What was the reason of imposing the penalty on banks by the RBI?
Courtesy: Business Standard