Deutsche Bank, J&K Bank fined by RBI for non-compliance of IRAC, KYC/AML norms

Recently, Deutsche Bank and Jammu and Kashmir Bank (J&K Bank) attracted monetary penalties of Rs 30.10 million and Rs 30 million, respectively, by the Reserve Bank of India (RBI) for non-compliance of various norms, including asset classification and Know Your Customer (KYC) norms.

A Press Release issued by the RBI with regard to J&K Bank read, “The Reserve Bank of India (RBI) has imposed, by an order dated November 05, 2018, a monetary penalty of Rs 30 million on The Jammu and Kashmir Bank Ltd. (the bank) for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms and Know Your Customer /Anti-money Laundering (KYC/AML) norms. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.”

A separate Press Release issued by the RBI with regard to Deutsche Bank read, “The Reserve Bank of India (RBI) has imposed, by an order dated November 05, 2018, a monetary penalty of Rs 30.10 million on Deutsche Bank A.G. (the bank) for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms, Know Your Customer /Anti-money Laundering (KYC/AML) norms, and on disclosure of monetary penalties imposed by the regulator. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.”

The Release for both the banks concluded, “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.”