Financial Daily from THE HINDU group of publications
Friday, Oct 08, 2004
Financial Daily from THE HINDU group of publications Friday, Oct 08, 2004 |
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Money & Banking
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RBI & Other Central Banks RBI slaps Rs 5 lakh fine on Citibank for flouting KYC norms Our Bureau
Mumbai , Oct. 7 THE Reserve Bank of India has slapped Rs 5 lakh fine on Citigroup's Indian banking unit, for flouting the central bank's `Know Your Customer' norms, with regard to not verifying the background of an account holder. Reportedly, the account holder in question was Mr Abdul Karim Telgi and his associates, who were involved in the `fake stamps scam'. Mr Telgi and his associates had opened accounts and parked funds with Citibank. A RBI spokesperson confirmed that Citibank had been fined for not verifying the background of an account holder and that the violation has attracted a penalty, which could go up to Rs 5 lakhs. When contacted Citigroup India's spokeswoman, Ms Madhulika Gupta, said, "We have a policy of not commenting on any regulatory investigations." Commercial banks had been asked by RBI to implement the Know Your Customer Norms, at the branch level to keep a check on money laundering. Banks were told to obtain all the information necessary to establish the identity and legal existence of each new customer. According to banking circles, this is the first time that RBI imposed a fine on any bank for not meeting the KYC norms. It is understood that the apex bank may be issuing similar fines to some other banks shortly, which may have also violated the KYC norms.
More Stories on : RBI & Other Central Banks | Foreign Banks
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