The central bank had started probing the banks following a sting operation by online magazine Cobrapost in March, which showed videos of bank officials helping decoy customers covert black or untaxed money into white.
The State Bank of India along with 21 state-owned and private banks, including a foreign one, were fined between Rs50 lakh and Rs3 crore (totalling Rs49.5 crore) by the Reserve Bank of India for violating customer identification and anti-money laundering norms.
The central bank had started probing the banks following a sting operation by online magazine Cobrapost in March, which showed videos of bank officials helping decoy customers covert black or untaxed money into white.
Similar fines were imposed on ICICI Bank, HDFC Bank and Axis Bank last month for violating the same norms.
The central bank said even though prima facie evidence of money laundering wasn’t found, any conclusive inference can be drawn only by an end-to-end investigation of the transactions by tax and enforcement agencies.
The RBI conducted scrutiny of banks’ books of accounts, internal control, compliance systems and processes in April. The sting by the portal, which was released in two parts, threw light on the loose compliance standards followed by banks. Several employees shown in the sting were suspended thereafter.
Apart from the 22 banks which were fined on Monday, the RBI issued cautionary letters to six foreign banks and one public-sector bank where it did not find any norm violations. The foreign banks include Barclays, BNP Paribas, Citibank, Royal Bank of Scotland, Standard Chartered Bank, Bank of Tokyo Mitsubishi and the state-owned State Bank of Patiala.
SBI, Bank of India, Bank of Baroda, Canara Bank, Central Bank of India, Indian Overseas Bank and Federal Bank have been fined about Rs3 crore each.
Punjab National Bank, YES Bank, Jammu & Kashmir Bank, Andhra Bank, Dhanlaxmi Bank, Oriental Bank of Commerce, Punjab and Sind Bank, Lakshmi Vilas Bank, United Bank of India and Vijaya Bank will be have to shell out between Rs2 crore and Rs2.50 crore.
Kotak Mahindra Bank, ING Vysya Bank, Deutsche Bank, Development Credit Bank and Ratnakar Bank will be paying fines ranging from Rs50 lakh to Rs1.50 crore.
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