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. 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 the 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.