Reserve Bank of India has imposed a hefty penalty of Rs 2 crore on HDFC Bank for lapses in adhering to KYC (Know Your Customer) and AML (Anti Money Laundering) norms on Monday.
A hefty fine of Rs 5 crore on Bank of Baroda (BoB) has been levied owing to the Rs 6,100 crore scandal exposed last year. Interestingly, three years back, when Cobrapost brought forward the blatant and brazen money laundering racket orchestrated by major Indian banks into broad daylight, HDFC and BoB were amongst the other prominent names in the culprit list, which also included PSU banks – SBI, Punjab National Bank, Canara Bank, Indian Bank, IOB, Central bank of India, IDBI Bank, Oriental Bank of Commerce, Allahabad Bank, Corporation bank and Dena bank, private banks – Yes Bank, Dhanlaxmi Bank, Federal bank, DCB Bank, ICICI Bank and Axis Bank and insurance companies – LIC Reliance Life, Birla Sunlife and Tata AIG.
In the much lauded Red Spider operation carried out by Cobrapost in 2013, the country’s second largest private sector lender was slapped a fine of Rs 4.5 crore and history has yet again repeated itself, proving that the banks are yet to learn a lesson .
Read about the Opereation Red Spider By Cobrapost here.
Check the video of Operation Red Spider revelation by Aniruddha Bahal
Reacting to the media reports about irregularities in advance remittances in various banks, the RBI had conducted a scrutiny of the transactions carried out by HDFC Bank and issued a show-cause notice, in response to which the bank has submitted a detailed report. HDFC Bank in a regulatory filing on Tuesday has said that it has implemented a “comprehensive corrective action plan” to strengthen its internal control mechanisms “so as to ensure that such incidents do not recur”.
Various irregularities by banks, such as non-submission and inordinate delays in filing of Suspicious Transaction Reports (STRs), besides opening of accounts by several entities without fulfilling KYC norms, were noticed by the RBI. But of course this is not the first time.
As Cobrapost had diligently pointed out earlier that the agencies entrusted under law to have an oversight over the banks, namely, the RBI, the Income Tax Department, Directorate of Revenue Intelligence, the Enforcement Directorate and various economic offences wings, are but a mockery of the entire process as, time and again, they have been grossly inefficient in keeping a check on the misgivings and discrepancies’ of the banks. This incident will keep on repeating itself over and again and no matter how many fines are levied and sting operations are done to reveal the faces of these corporate behemoths, there seems to be no significant chances improvement of the situation in future unless a radical effort is undertaken.
Featured image courtesy: inserbia.info
