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The Reserve Bank of India (RBI) has, by an order dated September 07, 2022, imposed a financial penalty of ₹36 lakh (Rupees Thirty-six lakh solely) on Industrial Bank of Korea (the financial institution) for non-compliance with sure provisions of the ‘Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016’. This penalty has been imposed in train of powers vested in RBI below the provisions of part 47 A (1) (c) learn with part 46 (4) (i) of the Banking Regulation Act, 1949. This motion is predicated on the deficiencies in regulatory compliance and isn’t supposed to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its clients. Background The Statutory Inspection for Supervisory Evaluation (lSE) of the financial institution was performed by RBI as regards to financial institution’s monetary place as on March 31, 2020, and the examination of the Risk Assessment Report and all associated correspondences pertaining to the identical revealed, inter alia, that the financial institution did not put in place a system of periodic evaluate of danger categorization of accounts. In furtherance to the identical, a discover was issued to the financial institution advising it to indicate trigger as to why penalty shouldn’t be imposed on it for failure to adjust to the mentioned instructions, as acknowledged therein. After contemplating the financial institution’s reply to the discover and oral submissions made in the course of the private listening to, RBI got here to the conclusion that the cost of non-compliance with the aforesaid RBI instructions was substantiated and warranted imposition of financial penalty, to the extent of non-compliance with such instructions. (Yogesh Dayal) Press Release: 2022-2023/854 |
