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The central bank, however, said its investigation of these banks did not reveal any prima facie evidence of money laundering. It observed 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.
The RBI scrutinised books of accounts, internal control, compliance systems and processes of the banks’ corporate offices and some branches during March-April 2013. This was to investigate the allegations of violation of several RBI regulations, Foreign Exchange Management Act guidelines, and so on, made by online magazine Cobrapost.com in a sting operation.
Based on the findings of the scrutiny, the Reserve Bank issued a show-cause notice to each of these banks, in response to which they submitted written replies. A similar scrutiny was also conducted at the corporate offices of 36 other banks during April and May 2013. The process of follow-up action in respect of these banks is at different stages of completion, the RBI said.
The scrutiny of the three banks revealed violations such as non-adherence to certain aspects of KYC norms and AML (anti-money laundering) guidelines.
It also found non-adherence of KYC for walk-in customers, including for sale of third-party products, omission in filing of cash transaction reports in respect of some cash transactions, sale of gold coins for cash beyond Rs 50,000.
The other violations found by the RBI include not obtaining PAN (permanent account number) card details from customers, non-verification of source of funds credited to a few non-resident ordinary accounts, and non-observance of certain safeguards in respect of arrangement of “at par” payment of cheques drawn by cooperative banks.
beena.parmar@thehindu.co.in
Source: thehindubusinessline
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