The Reserve
Bank of India (RBI) imposed Rs.1 crore penalty on
private sector lender HDFC
Bank for violating know
your customer (KYC) and anti-money laundering (AML) norms. The
penalty was imposed on 18
June 2019.
Reason:
RBI had received a reference from customs’ authorities regarding
submission of forged
bill of entries (BoEs) by certain importers to the bank
for remittance of
foreign currency.
RBI’s examination revealed the violations of the
RBI directions on KYC/AML norms and on reporting of frauds. RBI said that the
penalties are based on deficiencies in regulatory compliance. Also it is not
intended to pronounce upon the validity of any transaction or agreement entered
into by the banks with their customers.
RBI said that a notice was issued to HDFC Bank
on why monetary penalty should not be imposed for non-compliance with the directions.
The fine was imposed on HDFC after considering HDFC Bank’s reply, oral
submissions made during the personal hearing and additional submission made.
RBI imposed the penalty in exercise of powers vested to it under the provisions
of Section
47A(1)(c) with Section 46(4)(i) of the Banking Regulation Act, 1949.
