PNB, Bob, HDFC Bank Penalized By RBI for Violating Norms

Mumbai: The Reserve Bank of India (RBI) has imposed a penalty on Bank of Baroda (BoB) and HDFC Bank for violating the norms of Know Your Customer (KYC) and Anti-Money Laundering (AML). The Punjab National Bank also faced the same for ‘violation of RBI rules.’ Reports are that while BoB has been fined Rs. 5 crore, HDFC Bank will pay Rs. 2 crore as penalty and PNB has been fined for Rs. 3 crore.

Apart from violation of RBI rules, all the three banks have received ‘a corrective action plan to strengthen the internal control mechanism to avoid such incidents in the future.’ RBI also had carried out a corrective action plan in order to note the deficiencies and failures in the internal control mechanisms of the banks.

Following the penalty notice, BoB has asserted that they will be careful and will ensure that such incidences do not repeat. PNB said: “Though the amount of penalty is not material to the size of the Bank, reporting is done in terms of SEBI (LODR) Regulations 2015.”

Reports are that earlier this year, RBI has ordered to conduct an internal investigation to prevent violations in KYC and AML. Along with RBI, the Central Bureau of Investigation and Enforcement Directorate will also look into the matter.