Mumbai, Jun 11 (PTI): RBI on Monday imposed fines totalling Rs 10.5 crore on top three private lenders - Axis Bank, HDFC Bank and ICICI Bank - for violating KYC and anti-money laundering norms and said it was conducting inquiries against 36 other banks following an expose made by an online portal.

A penalty of Rs 5 crore has been imposed on Axis Bank, Rs 4.5 crore on HDFC Bank and Rs 1 crore on ICICI Bank after inquiring into charges levelled by a online portal Cobrapost.

“After considering the facts of each case...Reserve Bank came to conclusion that some of the violations were substantiated and warranted imposition of monetary penalty...” the central bank said in a statement. The three banks refused to comment on RBI’s action.

The penalty follows scrutiny carried out by RBI of books of accounts, internal control, compliance systems and processes of these three banks at their corporate offices and some branches during March/April 2013.

The scrutiny was conducted to probe the allegations of contravention of Know Your Customer (KYC)/anti-money laundering guidelines against them following the expose.
Although the investigation did not reveal any prima facie evidence of money laundering, RBI said 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”.

It further said that a similar scrutiny was being conducted at corporate offices of 36 other banks and “the process of follow up action in respect of these banks is at different stages of its completion.”

The scrutiny of these three banks, RBI said, revealed violation of certain regulations and instructions issued by the central bank from time to time.

The violations include non-observance of certain safeguards in respect of arrangement of “at par” payment of cheques drawn by cooperative banks, non-adherence to certain aspects of KYC and AML guidelines like risk categorisation and periodical review of risk profiling of account holders. They did not adhere to the KYC norms for walk-in customers for sale of third party products and failed to file cash transaction reports in respect of some cash transactions and sale of gold coins for cash beyond Rs 50,000.

In certain cases, the banks failed to obtain permanent account number (PAN) card details or form 60/61 and verify the source of funds credited to a few non-resident ordinary (NRO) accounts.

RBI had launched the investigation into the working of banks following the expose by Cobrapost which showed some bankers giving suggestions to customers on ways to bypass regulatory norms.

The first expose had named ICICI Bank, Axis Bank and HDFC Bank. Later, scores of other public and private sector banks and insurance companies figured in the expose.