RBI imposes Rs 25 lakh fine on Axis Bank for violation of KYC norms

TIL Desk/Business/New Delhi/ The Reserve Bank of India (RBI) has imposed a penalty of Rs 25 lakh on Axis Bank for violation/non-compliance of Know Your Customer (KYC) regulations. The penalty has been imposed in exercise of powers vested in the RBI under provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.

In a statement, the central bank said that the penalty has been imposed for “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”.It said that the 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.

A scrutiny was carried out by the 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 monitor or 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.