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Paltry RBI Fine For Axis Bank, HDFC Bank, ICICI Bank

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The Reserve Bank of India on Monday, 10 June '2013 said it had imposed penalties on Axis Bank, HDFC Bank and ICICI Bank for violating guidelines related to details of customer identity known as "know your customer" rules.

The central bank investigated the banks following an investigation by independent news website Cobrapost, which had alleged widespread money laundering practices at their branches.

“The scrutiny of these three banks revealed violation of certain regulations and instructions issued by RBI” central bank said in a statement.

“The investigation did not reveal any prima facie evidence of money laundering” RBI said. However it added, “any conclusive inference in this regard can be drawn only by an end to end investigation of the transactions by tax and enforcement agencies.”

Based on the scrutiny these banks were issued show cause notices and based on the replies of the banks RBI came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty, central bank said.

Penalties On Banks In India 'Peanuts': Subbarao

RBI Governor D Subbarao had said on 4 June 2014 that penalties for such offences in India amounted to "peanuts" compared to those in the western countries.

Erring banks can face a maximum penalty of Rs one crore in India, he told a news agency adding that it was upto the lawmakers to decide whether this should be increased.
 
Leaving it to Parliament the issue of amending laws to provide heavier penalty on banks indulging in such acts, RBI Governor D Subbarao had also dismissed perceptions that the central bank was going soft on errant banks.