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RBI fines 2 banks over KYC violation

The Reserve Bank of India has fined ICICI Bank and Bank of Baroda for violation of KYC and anti-money laundering norms. RBI said the systems prevailing in the two banks allowed fraudsters to open fictitious accounts in the name of a statutory organization and operate the accounts mainly for encashing cheques/demand drafts/postal orders of which they were not the rightful owners, for periods ranging from one month to two years, without being detected by the banks. RBI said it had fined ICICI Bank Rs 50 lakh while Bank of Baroda was fined Rs 25 lakh. The regulator’s action was based on complaint over a fraud in five banks – ICICI Bank, Baroda, State Bank of India, State Bank of Patiala and Axis Bank. The last mentioned three banks were spared by the regulator with a warning that they should ensure strict compliance of KYC norms.

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