Banks opened accounts for different customers with same PAN: RBI report

Following the Cobrapost expose, an audit report by the RBI showed that over 30 banks including public, private and foreign, have not followed various prescribed rules and regulations, reported CNN-IBN.

Not just small banks likethe Central Bank, Development Credit Bank and Indian Overseas BankBanking, but banking giants like the SBI, the Punjab National Bank, Citibank, Kotak Mahindra Bank and Standard CharteredviolatedKnow Your Customer (KYC) norms in multiple instances.

According to the report, bank systems did not throw up alerts when multiple demand drafts worth Rs 50,000 were issued to the same person, sundry deposits of over Rs 50,000 were opened to issue gold coins and in multiple transactions Rs 9.9 lakh was given by a single party on a single day, to avoid the Rs 10 lakh threshold.

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Some banks also failed to generate Cash Transaction Reports and Suspicious Transaction Reports due to the absence of Unique Customer Identification Number. Fifteen banks, including the Deutcshe Bank, RBS, Citibank and Punjab National Bank, have reportedly opened accounts for dummy PAN cards. In fact, 193 such instances were found in the Kotak Mahindra Bank, where different customers had the same PAN.

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The study has also revealed a nexus between co-operative banks and commercial banks. Central Bank, for instance, opened 200 accounts of the Sahara Credit Cooperative Society in different branches and on many occasions, high-value deposits were made into these accounts.

The RBI has also found that a few banks gave employees incentives to encourage the sale of third party products like insurance and mutual funds, sale of gold coinswith the incentives taking the form of foreign training or white goods.

Meanwhile, the Income Tax department has issued notices to three top private lenders in the countryICICI Bank,Axis Bank andHDFC Bank - in connection with alleged money laundering charges levelled by online portal Cobrapost.

The department has asked these banks to produce documents for verification as part of its tax evasion probe.

The notices have been issued under section 131 of the I-T Act (power regarding discovery, production of evidence) after going through two confidential reports submitted recently to the Department of Revenue by the RBI and the Financial Intelligence Unit (FIU).