MUMBAI: RBI Imposes Penalties HDFC Bank and BOB In the alleged Rs 6,000-crore forex related irregularities that came to light in October last year, a monetary penalty has been imposed by the Reserve Bank of India (RBI) on HDFC Bank and a state-run lender, Bank of Baroda.
HDFC Bank has been fined Rs 2 crore by the central bank, and penalised Bank of Baroda to the extent of Rs 5 crore. The development was informed to the exchanges by both banks. Punjab National Bank was also fined Rs 3 crore by the regulator for violation of the Banking Regulation Act.
Late last year, in relation to irregularities in advance import remittances in various banks, Central Bureau of Investigation (CBI) had conducted search and seizure operations across multiple bank branches of HDFC Bank and Bank of Baroda.
After Rs 6,100-crore import remittances were affected by Bank of Baroda’s Ashok Vihar branch in New Delhi, the central bank carried out an inspection. Hence, both CBI and the Enforcement Directorate are probing the huge remittances to Hong Kong from the bank. The investigators suspect that the amount was allegedly transferred in the garb of payments for imports that never took place.
“The penalty imposed on HDFC Bank is on account of pendency in receipt of bills of entry relating to advance import remittances and lapses in anti-money laundering guidelines, the bank said in a statement.”
Deficiencies & failures in internal control mechanisms were noted by RBI while investigating Bank of Baroda in respect of certain anti-money laundering provisions. These deficiencies relate to timely reporting of suspicious dealings to the Financial Intelligence unit, monitoring of transactions, and assigning of Unique Customer Identification Code to its clients.
Both banks stated that a comprehensive corrective action plan has been implemented by them to strengthen internal controls & hence, ensure that such lapses do not occur again.