MUMBAI: The Reserve Bank of India (RBI) has imposed a monetary penalty on HDFC BankBSE -0.20 % and a state-run lender, Bank of Baroda, in the alleged Rs 6,000-crore forex related irregularities that came to light in October last year.
The central bank has fined HDFC Bank Rs 2 crore, and penalised Bank of BarodaBSE 0.93 % to the extent of Rs 5 crore. Both banks have informed the exchanges about the development. The regulator also fined Punjab National Bank for Rs 3 crore for violation of the Banking Regulation Act.
Late last year, Central Bureau of Investigation (CBI) had conducted search and seizure operations across multiple bank branches of HDFC Bank and Bank of Baroda in relation to irregularities in advance import remittances in various banks.
The central bank carried out an inspection after Rs 6,100-crore import remittances were effected by Bank of Baroda’s Ashok Vihar branch in New Delhi. Both CBI and the Enforcement Directorate are probing the huge remittances to Hong Kong from the bank. The amount was allegedly transferred in the garb of payments for imports that never took place, investigators suspect.
The penalty imposed on HDFC Bank is on account of pendency in receipt of bills of entry relating to advance import remittances and lapses in anti-money laundering guidelines, the bank said in a statement.
The RBI’s investigation into Bank of Baroda has noted deficiencies and failures in internal control mechanisms in respect of certain anti-money laundering provisions. These deficiencies relate to monitoring of transactions, timely reporting of suspicious dealings to the Financial Intelligence unit, and assigning of Unique Customer Identification Code to its clients.
Both banks said that they have implemented a comprehensive corrective action plan to strengthen internal controls to ensure that such lapses do not occur again.