Rediff.com  » Business » Citi fined for flouting KYC norm

Citi fined for flouting KYC norm

Source: PTI
October 07, 2004 20:54 IST
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Reserve Bank of India has slapped a penalty of Rs 500,000 on Citi Group for failing to comply with 'Know Your Customer' guidelines by letting fake stamp scam accused Abdul Karim Telgi and associates to open accounts with the foreign bank.

"It is true that we have fined the bank," RBI official said without elaborating on the matter.

The central bank had detected the lapse on the part of Citi Bank two years ago during an inspection, RBI sources said.

Citigroup spokesperson when contacted by PTI, said as a matter of policy, the bank does not comment on regulatory matters.

Banking sources said Citigroup, the first bank to face such action for flouting KYC norms, had opened accounts in course of normal business and the bank realised the lapse after it was brought to its notice by the regulator.

The KYC have been put into place to curb money laundering activities.

Centrl Bureau of Investigation is presently investigating the multi-crore fake stamp scam involving Telgi and his associates.

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