Question : DERING IN BANKS

(a) whether some public/private sector and urban cooperative banks allegedly being involved in money laundering and violating Know Your Customer (KYC) norms have come to the notice of the Government in the recent past;

(b) if so, the details thereof along with the amount involved/cases detected during the last three years and the current year, bank and State/UT-wise;

(c) whether the Government has conducted any inquiry in this regard;

(d) if so, the details and the findings thereof and the action taken thereon, bank-wise; and

(e) the other remedial steps taken/ proposed to be taken by the Government/ RBI to curb money laundering in the country?

THE MINISTER OF FINANCE (SHRI ARUN JAITLEY)

(a) to (d): Reserve Bank of India (RBI) had conducted an investigation of a number of banks during March-May 2013. The investigation did not reveal any prima-facie evidence of money laundering. However, the scrutiny of these banks revealed violations of certain regulations and instructions issued by RBI, namely, non-adherence to certain aspects of Know Your Customer (KYC) norms and Anti Money Laundering (AML) guidelines like customer identification procedure, risk categorization, periodical review of risk profiling of account holders, periodical KYC updation; non-adherence of KYC for walk-in customers including for sale of third party products, omission in filing of Cash Transaction Reports (CTRs) in respect of some cash transactions, sale of gold coins for cash beyond `50,000; non-adherence to instructions on monitoring of transactions in customer accounts; non-adherence to instructions on classification of accounts as ‘in-operative’ / dormant and lapses in monitoring of transactions in dormant accounts; non-adherence to instructions which prohibit acceptance of cash above `50,000 from customers for sale of gold coins and issue of Demand Drafts etc.; not-obtaining of Permanent Account Number (PAN) card details or Form 60/61 as required; non-verification of source of funds credited to a few Non-Resident Ordinary (NRO) accounts; failure to re- designate a few accounts as NRO accounts though required, non-submission of proper information called for by the RBI.

Based on the findings of the investigations, the RBI issued a show cause notice to these banks and also came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty. The details are as under:

 
 Sl No.	Name of the Bank	Penalty Amount (` in crore) 1	Axis Bank Ltd	5.001 2	HDFC Bank Ltd	4.50 3	ICICI Bank Ltd	1.001 4	Andhra Bank	2.50 5	Bank of Baroda	3.00 6	Bank of India	3.00 7	Canara Bank	3.001 8	Central Bank of India	3.00 9	Development Credit	1.00	Bank Ltd 10	Dhanalaxmi Bank Ltd	2.00 11	Indian Overseas Bank	3.002 12	ING Vysya Bank Ltd	1.50 13	Jammu & Kashmir	2.501	Bank Ltd 14	Kotak Mahindra Bank Ltd	1.501 15	Oriental Bank of Commerce	2.00 16	Punjab and Sind Bank	2.50 17	Punjab National Bank	2.50 18	State Bank of India	3.00 19	The Federal Bank Ltd	3.00 20	The Lakshmi Vilas	2.50 Bank Ltd 21	The Ratnakar Bank Ltd	0.50 22	United Bank of India	2.50 23	Vijaya Bank	2.00 24	Yes Bank Ltd	2.00 25	Allahabad Bank	0.50 26	Bank of Maharashtra	0.501 27	Corporation Bank	1.50 28	Dena Bank	2.00 29	IDBI Bank Ltd	1.00 30	Indian Bank	1.00