From: RegTech Analyst
The central bank of India has found a lender’s due diligence procedures lacking and has fined the bank Rs one crore ($107,696) as a result.
Reserve Bank of India (RBI) came to the conclusion that HDFC Bank had failed to implement proper know your customer (KYC) processes after reviewing 39 accounts only to find that the bank had not exercised ongoing due diligence in those accounts.
The transactions in these current accounts were disproportionate to the declared income and profile of the customers, Business Standard reported.
RBI investigated further by basically asking the bank why it should not be fined. Having found the replies and oral submissions wanting, RBI issued the $107,696 fine.
RBI has been busy recently updating the regulations governing the financial sector of India.
For instance, in January it allowed Indian financial firms to use video-based methods to verify the identities of their customers, essentially giving them another KYC option.
Those new guidelines came, in turn, after the Bangladesh Financial Intelligence Unit introduced new electronic KYC alternatives to help financial firms onboard illiterate customers more easily.
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