The Financial Intelligence Unit (FIU) has imposed a fine of more than Rs 1.66 crore on Axis Bank. This fine has been imposed for “failing” to establish a mechanism to detect and report suspicious transactions.
The Financial Intelligence Unit (FIU) has imposed a fine of more than ₹16 million i.e. about 1.66 crore rupees on Axis Bank. The fine has been imposed on the bank for “failing” to establish a mechanism to detect and report suspicious transactions made in one of its branches by opening a “fraudulent” account in the name of the anti-terrorism commando force NSG.
The federal agency issued an order under Section 13 of the Prevention of Money Laundering Act (PMLA) on June 3. The Act empowers the director of the federal agency to impose a monetary penalty on a reporting entity (such as Axis Bank). A penalty can be imposed if an entity’s nominee director on the board of directors or any of its employees does not comply with the mandatory obligations under the said law. There was no immediate response to a question sent to Axis Bank in this regard.
According to the summary of the order with PTI-Bhasha, the entire incident is related to a case in which “an employee of Axis Bank was accused of being involved in a large-scale fraud and corruption scam in connivance with others.” The FIU order said that this “alleged misconduct relates to the opening of a fraudulent bank account in the name of government agency National Security Guard (NSG).”
The order said, “The report indicated that a manager of Axis Bank played a role in opening this account, which was allegedly intended to collect illegal money.” The order said that the FIU has imposed a total fine of Rs 1,66,25,000 against the bank on alleged charges of violation of the Anti-Money Laundering Act. The FIU, which comes under the Union Finance Ministry, is an agency which, like the Enforcement Directorate (ED), has been entrusted with the task of enforcing certain sections of the Anti-Money Laundering Act.
