The Reserve Financial institution of India (RBI) on Wednesday imposed a financial penalty of Rs 25 lakh on Axis Financial institution Ltd for non-compliance with sure provisions of instructions issued by the central financial institution about Know Your Buyer (KYC).
A scrutiny was carried out by RBI throughout February 2020 and March 2020 in a buyer account maintained with Axis Financial institution, and it was discovered that the financial institution did not adjust to the KYC instructions issued by the central financial institution.
“…the financial institution failed to watch/perform on-going due diligence within the stated account to make sure that the transactions had been in line with its data in regards to the buyer, buyer’s enterprise and threat profile,” the RBI stated in a launch.
The central financial institution had issued a discover to Axis Financial institution, advising it to indicate trigger why penalty shouldn’t be imposed on it for contravention of the stated instructions.
“After contemplating the financial institution’s reply to the discover and oral submissions made in the course of the private listening to, RBI got here to the conclusion that the cost of contravention of/non-compliance with the aforesaid RBI instructions had been substantiated and warranted imposition of financial penalty, to the extent of non-compliance with the aforesaid course,” it stated.
RBI stated it has imposed the penalty in train of powers vested in it beneath the Banking Regulation Act, 1949. It clarified that the motion is predicated on the deficiencies in regulatory compliance and isn’t supposed to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its prospects.
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