The regulator cited contravention of/non-compliance with certain provisions of directions issued by RBI contained in the Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016.
The Reserve Bank of India (RBI) on 1 September imposed a monetary penalty of rupees twenty five lakh on Axis Bank for violation of rules, the central bank said on Wednesday.
The regulator cited contravention of/non-compliance with certain provisions of directions issued by RBI 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.
The RBI carried out a scrutiny of Axis Bank 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 aforesaid directions issued by RBI, the regulator said.
“ie., the bank failed to monitor/carry out on-going due diligence in the said account to ensure that the transactions were consistent with its knowledge about the customer, customer’s business and risk profile,” it added.
Subsequently, a notice was issued to the bank. After considering the bank’s reply, the RBI came to the conclusion that the charge of contravention of/noncompliance with the aforesaid RBI directions were substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid direction, the RBI said.
