ICICI, Axis, HDFC Bank fined over Rs. 10 crore for violating KYC norms

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The Reserve Bank of India on Monday 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 an independent organisation, which had alleged widespread money laundering practices at their branches.

The RBI said it had not found initial evidence of money laundering against the three banks.

Axis Bank was fined Rs. 5 crore, HDFC Bank Rs. 4.5 crore and ICICI Bank, the country's second-largest lender, Rs. 1 crore.

Single document having identity, address proofs enough to open bank account: RBI

http://www.thehindubusinessline.com/industry-and-economy/banking/single-document-having-identity-address-proofs-enough-to-open-bank-account-rbi/article4187181.ece

Banks can accept documents such as Passport, PAN Card, Drivers’ Licence, Aadhaar letter, and NREGA Job Card as proof of identity as well as address, according to the Reserve Bank of India.

However, this is subject to the address on the document submitted for identity proof by the prospective customer is the same as that declared by him/her in the account opening form.

The single document submission for proof of identity and address is aimed at easing the burden on the prospective customers in complying with know-your-customer requirements for opening new accounts, the RBI said in a notification.

So far, banks have been calling for separate documents for verification of identity and address even though the documents for identity proof (Passport, PAN Card, Drivers’ Licence etc.) also carry the address of the individual concerned. This was to comply with their obligation under the Prevention of Money Laundering (PML) Act, 2002.

The RBI has also done away with the requirement of introduction from an existing customer of the bank for opening of bank accounts.

Since introduction is not necessary for opening of accounts under PML Act and Rules or Reserve Bank’s extant KYC instructions, banks should not insist on introduction for opening bank accounts of customers, the central bank said.

Poor KYC drill lands 3 banks in Net frauds - Karnataka

http://www.thehindubusinessline.com/industry-and-economy/banking/article3812271.ece

Lack of due diligence at the time of opening two new accounts cost at least two banks in the State a few lakh rupees in 2011-12, according to the banking ombudsman for Karnataka.

Without naming the banks or whether they were in the public or private sector, M. Palaniswamy told a news conference on Thursday that because of lack of vigil, fraudsters had opened fake accounts in three banks in Karnataka. They siphoned off money from the accounts of two customers via the Web.

They remain untraced as they had given fake details in the banks’ KYC (know your customer) drill and the banks had failed to verify them.

RBI’s banking ombudsman awarded the compensation to the victims in two of these Net banking frauds. The third is pending.

However, in the last two years, banks have got wiser to Net frauds. They are placing strong three-layered firewalls, suspending e- and mobile banking facilities of suspects and complying with the RBI’s stern directives.

Net frauds per month had come down to 2-3 cases. “We are hitting them hard. Banks also face penalty for non-compliance,” he said.

Palaniswamy said his 20-member team received 3,647 complaints of bank customers during the period from July 2011 to June 2012. Of them 3563 were resolved or dismissed and 84 were carried over into the current year.

“The number has increased marginally compared to 3,470 complaints received in 2010-11,” he said, adding that the Karnataka scene was much better than in Kolkata or Mumbai.

There were fewer problems related to ATM transactions compared to 2009-10 and 2010-11. It must be because banks have largely stabilised their ATM networks and also customers have got used to the system, he observed.

There were 30 complaints about education loans, higher than earlier perhaps because those students had missed the small print. There were 732 cases related to credit and debit cards; 446 about loans and advances; 287 cases on deposit accounts and 113 pension cases.