" After considering the facts of each case and individual bank's reply, as also, personal submissions, information submitted and documents furnished, the Reserve Bank came to the conclusion that some of the violations of serious nature were substantiated and warranted imposition of monetary penalty as determined above on two banks, namely, ICICI Bank Ltd. and Bank of Baroda. Failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions and their impact, the statement said."
New Delhi, Dec 17 - The Reserve Bank of India (RBI) Wednesday imposed a penalty of Rs.50 lakh on ICICI Bank and Rs.25 lakh on Bank of Baroda for violation of KYC norms, a statement issued by the apex bank said.

The Reserve Bank of India has imposed monetary penalty on the following two banks for violation of its instructions, among other things, on know your customer(KYC)/anti money laundering (AML), the statement said.

The statement said the bank had received a complaint from a reputed statutory organisation in August, 2013, through which the details of a fraud perpetrated in five banks - State Bank of India, ICICI Bank Ltd., Bank of Baroda, Axis Bank Ltd. and State Bank of Patiala - with the connivance of certain officials of the statutory organisation were brought to the Reserve Bank's notice.

The fraudsters had managed to open fictitious accounts in the name of the statutory organisation in the above five banks and operated the accounts mainly for encashing cheques/demand drafts/postal orders of which they were not the rightful owners, for periods ranging from one month to two years, without being detected by the banks, it stated.

A scrutiny was undertaken in the above five banks in January, 2014, to ascertain the adherence to extant regulatory instructions by banks in the instant case.

After considering the facts of each case and individual bank's reply, as also, personal submissions, information submitted and documents furnished, the Reserve Bank came to the conclusion that some of the violations of serious nature were substantiated and warranted imposition of monetary penalty as determined above on two banks, namely, ICICI Bank Ltd. and Bank of Baroda. Failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions and their impact, the statement said.

The RBI has also cautioned State Bank of India, Axis Bank and State Bank of Patiala in the same case.


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