“… the bank did not monitor / perform due diligence on said account to ensure transactions were consistent with its knowledge of the client, client activity and risk profile,” t -she declared in a press release.

A notice was issued to the bank advising them to justify why the penalty should not be imposed on them for contravening the instructions.

After reviewing the response to the notice and the oral submissions made during the personal hearing, the RBI stated that it “came to the conclusion that the charge of contravention / failure to comply with RBI instructions above was justified “and justified the imposition of a financial penalty.

The RBI added, however, that the sanction is based on breaches of regulatory compliance and is not intended to rule on the validity of any transaction or agreement entered into by the bank with its customers.