The Reserve Bank of India on Monday penalised 22 banks, including the country’s largest bank State Bank of India, for violating norms including anti-money laundering and Know Your Customer (KYC) norms.
The central bank said the investigation did not reveal any prima facie evidence of money laundering. However, any conclusive inference in this regard can be drawn only by an end-to-end investigation of the transactions by tax and enforcement agencies, it said.
The move comes amidst reports of a sting operation conducted by Cobrapost.com alleging money laundering by 23 banks and insurance companies including LIC of India, Reliance Life Insurance and Birla Sunlife and Tata AIG.
Among public sector lenders, SBI, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India and Indian Overseas Bank have been imposed a monetary penalty of Rs 3 crore each, while Punjab National Bank, Andhra Bank and United Bank of India are charged with Rs 2.5 crore each.
Among private sector banks, RBI slapped fine on Federal Bank (Rs 3 crore), YES Bank (Rs 2 crore), Kotak Mahindra Bank Ltd (Rs 1.5 crore) and ING Vysya Bank (Rs 1.5 crore).
The scrutiny revealed violations such as non-adherence to certain aspects of KYC norms and AML guidelines.
Seven other banks including Barclays Bank, BNP Paribas, Citibank, Royal Bank of Scotland, Standard Chartered, State Bank of Patiala and Bank of Tokyo Mitsubishi UFJ -- faced similar scrutiny and the banks’ written or oral explanation were found to be satisfactory or no violation of serious nature has been established.
It has, therefore, been decided not to impose any monetary penalty but to issue only suitable cautionary letters, the Reserve Bank said.