Cobrapost sting: RBI finds violations by banks, insurers

The RBI probing allegations of money laundering by several banks and insurance firms has found that these entities not only failed to adhere to Know-Your-Customer (KYC) norms but also permitted customers to divide cash deposits into small tranches below the benchmark level to avoid reporting or detection of these transactions and accepted cash without a PAN card or with a fake PAN card.

The central bank in its preliminary finding has found many transactions using fake PAN cards, where a large portion of the money was used for purchasing gold, official sources said, adding that a final report was awaited.

The RBI probe is triggered by the first part of the website Cobrapost's sting operation against ICICI Bank, HDFC Bank and Axis Bank. However, sources did not give any details on the findings against individual banks.

According to the sources, the report also found that the banks did not report many large transactions totalling crores of rupees and most of them without PAN card, and facilitated sale of gold worth lakhs without a PAN card and through cash.

The lenders also permitted purchase of gold using credit cards, approved several transactions of gold purchase just below the benchmark Rs 50,000 on a single day from a single customer, allowed huge cash transactions in Non Resident Ordinary (NRO) rupee accounts from unknown IDs and accepted cash deposits over Rs 50,000 without the mandatory PAN card, the sources added, referring to the report. fe

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