The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹25 lakh on Axis Bank Ltd. for contravention of/non-compliance with certain provisions of directions issued by it which are contained in the Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016.
“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the RBI said.
A scrutiny was carried out by RBI during February 2020 and March 2020 in a customer account maintained with the bank and it was observed that the bank had failed to comply with the directions, RBI said in a release.
It said the bank had failed to monitor/carry out on-going due diligence in that account to ensure that the transactions were consistent with its knowledge about the customer, customer’s business and risk profile.
A notice was issued to the bank advising it to show cause why penalty should not be imposed on it and after considering the bank’s reply to the notice and oral submissions made during the personal hearing,” RBI came to the conclusion that the charge of contravention of/non- compliance with the aforesaid RBI directions were substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid direction,” RBI said.
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