The Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on HDFC Bank for non-compliance of directives with regard to KYC and Anti-Money Laundering norms and on reporting of frauds. The central bank has also fined South Indian Bank for Rs 10 lakh for non-compliance with directions issued by it on ‘guarantees and co-acceptances’. With regard to the penalty on HDFC Bank, the RBI said the penalty has been imposed in exercise of powers vested in it under the relevant provisions, taking into account failure of the bank to adhere to the aforesaid directions issued by it. The central bank also said the action is based on deficiencies in regulatory compliance. The issue pertains to a reference to the RBI from customs authorities regarding submission of forged bill of entries by certain importers for remittance of foreign currency. HDFC Bank said in a statement it has taken necessary measures to strengthen its internal control mechanisms so as to ensure that such incidents do not recur. With regard to South Indian Bank, the RBI said the penalty has been imposed in exercise of powers vested in it under the provisions of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by RBI.
