The Reserve Bank of India (RBI) has imposed a penalty of Rs 27 crore on 13 banks for violating several norms such as know your customer (KYC) and anti-money laundering (AML). The RBI had undertaken a scrutiny on advance import remittances in 21 banks in October and November 2015 and came to the conclusion that 13 banks had violated AML and KYC norms under Foreign Exchange Management Act (FEMA). The banks are Allahabad Bank, Bank of India, Bank of Baroda, Canara Bank, Corporation Bank, HDFC Bank, IndusInd Bank, Punjab National Bank, RBL Bank, State Bank of Bikaner and Jaipur, State Bank of Mysore, Syndicate Bank and UCO Bank and the penalties to them range between Rs.1 crore and Rs.5 crore.
The RBI further advised eight other banks to put in place appropriate measures and review them from time to time to ensure strict compliance with KYC requirements and FEMA provisions on an ongoing basis. In October 2015, the Central Bureau of Investigation (CBI) conducted raids across bank branches, including those of Bank of Baroda and HDFC Bank, as part of a foreign exchange scam, where bank employees had allegedly liaised with certain people to illegally transfer funds to various accounts in Hong Kong and the UAE, flouting foreign exchange norms set by the central bank.