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<ul><li>The new changes will affect companies like <keyword id="6357120" type="DEFINITION" weightage="20" keywordseo="paytm">Paytm</keyword>, <keyword id="6357886" type="UNKNOWN" weightage="20" keywordseo="phonepe">PhonePe</keyword>, <keyword id="143842" type="COMPANY" weightage="20" keywordseo="Mobikwik">Mobikwik</keyword>, and <keyword id="2750705" type="PERSON" weightage="20" keywordseo="Google-Pay">Google Pay</keyword> among others.</li><li>These mobile wallet operators had certain leeway with <keyword id="167905" type="COMPANY" weightage="20" keywordseo="KYC">KYC</keyword> whereas banks had to meet full KYC requirements.</li><li>To cushion the need for new compliance, the <keyword id="30067" type="COMPANY" weightage="20" keywordseo="RBI">RBI</keyword> has also doubled the amount of money that can be stored in these wallets to ₹2 lakh.</li><li>The RBI had earlier in October 2018 announced that KYC and interoperability will be voluntary for PPIs.</li><li>Check out the latest news and updates on <a href="https://www.businessinsider.in/">Business Insider</a>.</li></ul><keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> governor Shaktikanta Das today said that prepaid mobile wallet operators like Paytm, PhonePe, Mobikwik, and Google Pay among others will also need to implement full KYC (Know Your Customer) process soon. KYC guidelines are mandatory mobile companies and financial services companies to identify and verify their customers, which is done at the time of opening an account and repeated at regular intervals. Currently, <keyword id="6368227" type="UNKNOWN" weightage="20" keywordseo="Mobile-Wallets">mobile wallets</keyword> had some leeway, whereas similar products issued by banks had to meet all the KYC norms. The RBI had earlier in October 2018 announced that KYC and interoperability will be voluntary for prepaid payment instruments (PPIs) such as cards, wallets etc. This has been made mandatory now. “As migration towards interoperability has not been significant, it is now proposed to make interoperability mandatory for full payment acceptance infrastructure. To incentivise migration of PPIs to full KYC it is proposed to increase the current outstanding balance from ₹1 lakh to ₹2 lakh,” said Das. The apex bank’s statement said that the move was being brought in ‘to promote optimal utilisation of payment instruments, and given the constraint of scarce acceptance infrastructure (like PoS devices, ATMs, QR codes, bill-payment touch points, etc.)’. The new KYC norms for mobile wallets will not kick off immediately. The central bank said that detailed instructions for the same would be released soon. Additionally, the RBI has also put forth another benefit for non-bank PPIs. "As a confidence-boosting measure, it is proposed to allow the facility of cash withdrawal, subject to a limit, for full-KYC PPIs of non-bank PPI issuers as well," said the statement from RBI. With this, wallets like that of Paytm, Mobikwik can be used to withdraw cash from ATMs. Earlier, banking PPIs like Yono app from SBI had this facility.

You need to do full KYC for mobile wallets too – but you can store twice the amount of money

<ul><li>On 16 October, the Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) issued a set of guidelines pertaining to the transfer of money between different mobile wallets such as <keyword id="6357120" type="DEFINITION" weightage="20" keywordseo="paytm">Paytm</keyword>, Oxigen and MobiKwik. </li><li>The quick and seamless transfer between mobile wallets will make them a natural substitute for bank accounts and lead to a spurt in digital payment transactions. </li><li>As of right now, e-wallets function as closed-loop systems, which means that funds aren’t allowed to be transferred between mobile wallets run by different companies.</li></ul>On 16 October, the Reserve Bank of India (RBI) issued <a href="https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11393&amp;Mode=0">a set of guidelines</a> pertaining to the transfer of money between different mobile wallets such as Paytm, Oxigen and MobiKwik, which are formally categorised as “pre-paid instruments”. As of right now, e-wallets function as closed-loop systems, which means that funds aren’t allowed to be transferred between mobile wallets run by different companies. The quick and seamless transfer between mobile wallets will make them a natural substitute for bank accounts. It will also enable issuers of mobile wallets and customers to clear and settle transactions using one platform instead of multiple payment systems. The rules allow for the transfer of money between one mobile wallet to another, and from a mobile wallet to a bank account and vice versa through the <keyword id="2736678" type="COMPANY" weightage="20" keywordseo="Unified-payments-interface">Unified Payments Interface</keyword> (UPI), the instant payment transfer system developed by the National Payments Corporation of India for transferring funds between bank accounts through mobile apps. The system is regulated by the RBI. The process of “interoperability” will be implemented in a phased manner. The first phase - to be completed within the next six months - will involve the transfer between different mobile wallets while the second will involve the transfer between mobile wallets and accounts registered with scheduled commercial banks. The third and final stage will involve the issuance of stand-alone payment cards by mobile wallet providers. All mobile wallet accounts that are in compliance with KYC norms will be eligible for money transfers. There will be no minimum net worth requirement. In addition to addressing the <keyword id="772857" type="PERSON" weightage="20" keywordseo="interoperability">interoperability</keyword> of e-wallets, the guidelines also comprise avenues for customers to escalate grievances. The move by India’s central bank is aimed at facilitating a spurt in digital payment transactions, which are already growing at a commendable rate, which is surprising given the plethora of know-your-customer (KYC) requirements that digital payments firms have been faced with since March. For example, in August 2018, the number of <keyword id="6356915" type="UNKNOWN" weightage="20" keywordseo="e-wallet">e-wallet</keyword> transactions reached a total volume of <a href="https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/43CT_111020184D60CBF5ACBA43AF9E703986EAAF71AD.PDF">₹155.7 billion</a> - a record high.

The RBI's new guidelines will allow you to transfer funds between different mobile wallets

The guidelines issued by the <keyword id="6354335" type="CITY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (<keyword id="30067" type="ORGANIZATION" weightage="100" keywordseo="RBI">RBI</keyword>) for prepaid payment instrument (PPI) licence holders are not going well with the mobile wallet companies. Reportedly, the <keyword id="6368227" type="UNKNOWN" weightage="20" keywordseo="Mobile-wallets">mobile wallets</keyword> have raised several concerns over RBI’s proposed guidelines. One of the issues that these companies have is of the know your customer (KYC) norms. "Some clarifications were sought on certain clauses, while PPIs discussed issues around KYC, especially since it could be an overkill for small transactions," one of those at the meeting told ET. The <keyword id="4128581" type="UNKNOWN" weightage="20" keywordseo="payment-council-of-india">Payment Council of India</keyword> and the Internet and <keyword id="592650" type="ORGANIZATION" weightage="20" keywordseo="Mobile-Association-of-India">Mobile Association of India</keyword> (IAMAI) had organised a meeting in which they gave out feedback on the proposed norms. As per RBI’s draft guidelines, the PPIs will have to move to full KYC details within 60 days of the PPI licence being issued. Presently, e-wallets and other such prepaid payment instruments can only hold up to Rs 20,000 per user with minimum KYC. "In the feedback given to RBI, the main request is that minimum KYC be retained or that the deadline for implementing full KYC be extended to 18-24 months, since by then telecom companies would have done Aadhaar linking of mobile numbers. That will help mobile wallets do full KYC for all customers," one industry member told ET, adding “The other ask is that RBI should publish the interoperability guidelines for wallets.” Some of these concerns, especially full KYC compliance, were raised at the meeting, according to those present. PPIs are currently seeing monthly transactions of Rs 6,000 crore, of which about Rs 4,000 crore is from money transfers while corporate solutions such as smart cards for expense management constitute about Rs 500 crore, ET quoted people with knowledge of the matter.

Mobile wallets are not happy with RBI’s latest draft guidelines. Here’s why

In a significant move, the <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="100" keywordseo="rbi" source="keywords">RBI</keyword>) has imposed penalties on <keyword id="19952948" type="General" weightage="20" keywordseo="axis-bank" source="keywords">Axis Bank</keyword> and <keyword id="19895995" type="General" weightage="20" keywordseo="hdfc-bank" source="keywords">HDFC Bank</keyword> for lapses in regulatory and statutory compliance. The fines, which amount to a total of ₹2.91 crore, highlight the central bank's ongoing efforts to ensure that financial institutions adhere to prescribed guidelines. The RBI levied a penalty of ₹1.91 crore on Axis Bank for violations that included contraventions of the <keyword id="19976511" type="General" weightage="20" keywordseo="banking-regulation-act" source="keywords">Banking Regulation Act</keyword> and non-compliance with specific RBI directions related to interest rates on deposits, Know Your Customer (KYC) norms, and collateral-free loans for agriculture. Meanwhile, HDFC Bank faced a ₹1 crore fine for failing to comply with directions concerning interest rates, customer service practices, and the use of recovery agents. <h2>Axis Bank: Key regulatory failures</h2>Axis Bank’s penalty stems from a supervisory evaluation conducted by the RBI based on its financial position as of March 31, 2023. Upon reviewing the bank’s activities, the RBI found several areas of non-compliance. One of the primary issues was the opening of savings deposit accounts in the names of ineligible entities, a direct violation of regulatory norms. Additionally, Axis Bank was found to have issued multiple customer identification codes to certain clients instead of assigning a Unique Customer Identification Code (UCIC), which is mandatory to avoid duplication and ensure proper monitoring of accounts. The bank also violated guidelines concerning agricultural loans. RBI regulations prohibit banks from asking for collateral for agricultural loans up to ₹1.60 lakh, but Axis Bank had obtained such collateral in certain cases. Lastly, a wholly-owned subsidiary of Axis Bank was found to be engaged in providing technology services—an activity that is not permissible for a banking company. This contravention added to the overall penalty levied by the central bank. <h2>HDFC Bank: Regulatory shortcomings</h2> In the case of HDFC Bank, the RBI’s investigation was based on its financial position as of March 31, 2022. The central bank uncovered several violations, including the offering of gifts, specifically covering the first-year premium for complimentary life insurance, which exceeded the permissible limit of ₹250. Moreover, HDFC Bank was found to have opened savings accounts in the names of ineligible entities, a violation similar to that of Axis Bank. Another significant failure was the bank’s inability to ensure that customers were not contacted by bank officials outside the permitted time frame of 7 am to 7 pm. <h2>RBI's Stance on Compliance</h2> While the RBI has been stringent in penalising both banks, it clarified that these penalties are based on lapses in regulatory compliance and are not reflective of the validity of any transactions or agreements between the banks and their customers. The central bank’s message is clear—financial institutions must adhere strictly to guidelines to maintain transparency, protect customers, and uphold the integrity of the banking system. The penalties serve as a reminder to all banks to stay vigilant and maintain high standards of compliance to avoid such financial and reputational damage in the future. Both Axis Bank and HDFC Bank have accepted the fines and are expected to take corrective actions to avoid future infractions. For customers, this action from the RBI is a reassurance that regulatory oversight remains a priority to ensure fair banking practices across the country.

RBI slaps fine of Rs 2.91 crore on Axis Bank and HDFC Bank: All details

New Delhi, <keyword id="20004114" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="keywords">Vijay Shekhar Sharma</keyword>, one of the most recognised faces of India's fintech industry, has seen a fair share of controversies. Sharma launched <keyword id="19898109" type="General" weightage="20" keywordseo="paytm" source="keywords">Paytm</keyword> - an acronym for 'pay through mobile' - offering mobile recharges. He launched wallet services in 2011 but the big push came with the 2016 demonetisation. He took out front-page ads in top newspapers with Prime Minister Narendra Modi's photo, calling demonetisation the "boldest decision in the financial history of independent India". With fewer currency notes in circulation, Paytm was on a roll. Sharma made a splash in 2018 by getting USD 300 million investment in Paytm from <keyword id="19921921" type="General" weightage="20" keywordseo="warren-buffett" source="keywords">Warren Buffett</keyword>'s Berkshire Hathaway. *Controversies* Paytm was mired in controversies with its Chinese connection following huge investments from Alibaba Group. The Chinese internet firm became the biggest shareholder in Paytm with a 34.7 per cent stake before the company's initial public offer. Alibaba group firm Antfin sold around 5 per cent shares to lower its stake below 25 per cent to comply with regulatory requirements at the time of IPO. To shed its Chinese-owned entity image, Paytm in August 2023 announced that founder and CEO Vijay Shekhar Sharma would acquire a 10.3 stake in Antfin through his overseas entity Resilient Asset Management BV which will make him the largest stakeholder in the company with 19.42 per cent stake. In return, Resilient issued a debt instrument --optionally convertible debentures, to Antfin thereby maintaining the economic interest of Alibaba group firm. With this transaction, Antfin's direct stake in Paytm was reduced to 13.5 per cent. Antfin further sold 3.6 per cent in Paytm to bring its shareholding to less than 10 per cent and at present holds 9.89 per cent of the fintech firm. The company's market cap has eroded drastically since the time of its listing. The company's IPO opened on November 8, 2021, in the price band of Rs 2,080-2,150 per share. The Paytm IPO made history with over Rs 18,300 crore share sale 'making it the largest public issue in India's corporate history. But the company's stock made a weak debut in the market on November 18 and hit a lower circuit after recording about 20 per cent decline during trading hours. It finally closed at Rs 1,560, down by about 27 per cent, compared to its issue price of Rs 2,150. Since then, Paytm shares have not been able to cross even half the mark of the issue price. After the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>'s January 31 move, One97 Communications shares tanked around 40 per cent to close at Rs 487.05 on BSE on Friday. Billionaire businessman <keyword id="19952201" type="General" weightage="20" keywordseo="warren-buffet" source="keywords">Warren Buffet</keyword>'s Berkshire Hathaway sold its stake in Paytm at a loss of 31 per cent per share in November 2023. Berkshire Hathaway had invested in Paytm for about Rs 1279 per share but sold it for Rs 877.29 apiece. At present, Cayman Island-registered SAIF III Mauritius Company Limited is the single largest direct shareholder in Paytm with a 10.83 stake followed by Sharma's Resilient Asset Management BV with a 10.29 per cent stake. SAIF Partners is led by Chinese-origin entrepreneurs with Andrew Y Yan as its managing partner. *Paytm run-ins with RBI* RBI on June 19, 2018, prohibited Paytm Payments Bank from opening any new account and wallet with effect from June 20, 2018, on account of supervisory concerns, which were lifted by RBI on December 27, 2018, with effect from December 31, 2018. The Office of Banking Ombudsman issued a show-cause notice dated March 6, 2019, for Paytm Payments Bank's failure to monitor a certain account maintained with it which had shown a sudden increase in the velocity of daily transactions involving immediate transfer to other banks. The actions were found to be in the violation of RBI's provisions on KYC. RBI rejected Paytm Payments Services Ltd's (PPSL) application to operate as a payment aggregator on November 25, 2022. The banking regulator asked the firm to re-submit applications within 120 days after it gets government approval on investment made by OCL into PPSL as per FDI guidelines. The regulator asked PPSL to continue operations with the condition that no new merchants should be onboard. After completion of 120 days, RBI again granted PPSL an extension but without removing the bar on new merchant onboarding. RBI issued a show cause notice to PPBL on July 29, 2021 for submitting false information to RBI confirming completion of the transfer of the Bharat Bill Payment Operating Unit ("BBPOU") by OCL to PPBL on August 28, 2017. The actual transfer of the BBPOU business by the Company to PPBL was completed only by March 31, 2021. RBI on October 1, 2021, imposed a penalty amounting to Rs 1 crore on PPBL for a contravention of the Payment and Settlement Systems Act, 2007. RBI imposed a penalty of Rs 5.93 crore on PPBL on October 10, 2023, after it found several non-compliances including banks failure to identify beneficial owners in respect of entities on-boarded by it for providing payout services. RBI found that PPBL did not monitor payout transactions and carry out risk profiling of entities availing payout services, breached the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services. The banking regulator found that PPBL reported a cyber security incident with delay and failed to implement device binding control measures related to 'SMS delivery receipt check'. PPBL video-based customer identification process infrastructure failed to prevent connections from IP addresses outside India.

Vijay Shekhar Sharma: The controversies of the architect of fintech

<ul><li>India's Enforcement Directorate (ED) has sent a show cause notice to <keyword id="11426293" type="UNKNOWN" weightage="20" keywordseo="wazirxs-founder-nischal-shetty">WazirX’s founder Nischal Shetty</keyword> and director Sameer Mhatre.</li><li>The notice asks the two to explain <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> transactions worth ₹2,971 crore.</li><li>The ED had accused WazirX of not collecting the required documents to carry out KYC verification and facilitating <keyword id="6355008" type="UNKNOWN" weightage="20" keywordseo="Money-laundering">money laundering</keyword>.</li><li>Shetty claims that WazirX has not received any show cause notice as of June 11 but plans to cooperate with the authorities once any formal communication comes through.</li></ul>India’s financial investigation agency, the Enforcement Directorate (ED), is cracking down on the biggest cryptocurrency exchange in the country, WazirX, for using the platform to aid money laundering. The ED has sent a show cause notice to WazirX’s founder and director <keyword id="2675296" type="PERSON" weightage="20" keywordseo="Nischal-Shetty">Nischal Shetty</keyword> to explain cryptocurrency transactions worth ₹2,971 crore under the Foreign Exchange Management Act (FEMA) 1999. In addition to Shetty, the ED notice also names another director, Sameer Mhatre. "WazirX is yet to receive any show cause notice from the Enforcement Directorate as mentioned in today's media reports. WazirX is in compliance with all applicable laws," Shetty told Business Insider in a statement. "Should we receive a formal communication or notice from the ED, we'll fully cooperate in the investigation." <cmsannotation type="cmsannotation" annotationid="What are the accusations leveled against WazirX?" comment="subhead" text="What are the accusations leveled against WazirX?">What are the accusations leveled against WazirX?</cmsannotation> As part of its ongoing investigation into an investigation into illegal online betting apps owned by Chinese nationals, the ED has accused WazirX of not collecting the required documents to carry out KYC (know your customer) verification of its users. <div type="twitter" handle="dir_ed" handlename="ED" image="http://pbs.twimg.com/profile_images/489323563262816257/i9Of1j9I_normal.png" favoritecount="969" retweetcount="320" status="ED has issued Show Cause Notice to WazirX Crypto-currency Exchange for contravention of FEMA, 1999 for transaction… https://t.co/dcU8XlOugB" createdat="1623397497000" id="1403256929435017217"></div> This, the agency said, is in violation of anti-money laundering norms. “WazirX does not collect requisite documents in clear violation of the basic mandatory Anti Money Laundering (AML) and Combating of Financing of Terrorism (CFT) precaution norms and FEMA guidelines,” the agency said in a statement, according to <a href="https://www.moneycontrol.com/news/business/ed-issues-show-cause-notice-to-wazirx-directors-nischal-shetty-and-sameer-mhatre-under-fema-7021191.html">Money Control</a>. According to ED, WazirX was used by the accused Chinese nationals to launder ₹57 crore by depositing the amount into their WazirX wallet and then converting them to cryptocurrency Tether — a stablecoin that has been accused of manipulating the price of Bitcoin in the past. The Tether holdings were then transferred to <keyword id="6359140" type="ORGANIZATION" weightage="20" keywordseo="binance">Binance</keyword> wallet, which is the largest cryptocurrency exchange in the world as per volume. Binance Holdings is registered in the Cayman Islands, <a href="https://www.livemint.com/news/world/cayman-islands-most-preferred-destination-to-hide-and-launder-money-study-11582054375479.html">notorious</a> for money laundering, and is currently under investigation by the US Justice Department and Internal Revenue Service. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/chinas-cryptocurrency-crackdown-grows-with-1100-people-behind-bars-for-money-laundering/articleshow/83401581.cms">China’s crypto crackdown grows, with 1100 people behind bars for money laundering</a> <a href="https://www.businessinsider.in/cryptocurrency/news/a-large-number-of-uk-crypto-firms-are-not-meeting-anti-money-laundering-standards-the-national-regulator-has-said/articleshow/83210195.cms">A large number of UK crypto firms are not meeting anti-money laundering standards, the national regulator has said</a>

WazirX has been asked to explain ₹2,971 crore of crypto transactions allegedly used to launder money

New Delhi, Dec 6 () Postmen and grameen dak sevaks might soon be able to sell insurance policies, with regulator Irdai issuing guidelines wherein such people have to be sponsored by the India Post Payments Bank (IPPB).
 The IPPB, which is a corporate agent, can seek permission from Irdai for sponsoring postmen and grameen dak sevaks of Department of Posts (DoP) to act as Point of Salesperson (PoS), Irdai said.
 ln case the authority grants permission, IPPB shall be responsible for all acts of omission and commission of the persons appointed as PoS, it added.
 The regulator said the DoP will have to identify postmen and grameen dak sevaks and furnish the list to it from time to time and IPPB may have tie-ups with as many number of insurers as allowed under the regulations.
 "These postmen and grameen dak sevaks will be operating largely in un-banked and under-banked geographical areas and can provide the last mile reach to sell insurance products in remote and rural areas," Irdai said.
 Bulk of products in motor insurance, travel insurance, personal accident insurance, term insurance, require very little under writing as these are largely pre-underwritten products.
 Based on the information provided by the prospectus, the insurance policy is automatically generated by the system. The intervention required for such a product is minimal and the training and examination for such persons could be of a lesser degree, Irdai said.
 "Therefore, in order to facilitate the growth of insurance business in the country and to enhance insurance penetration and insurance density, the authority as part of its developmental agenda issued the guidelines on PoS Persons," Irdai said.
 "This would provide financial inclusion and increase insurance density and penetration in the country which is in line with the objective of the Authority," it said.
 The IPPB will be responsible for training and certification of postmen and grameen dak sevaks; daily reconciliation and reporting of all transactions; compliance to code of conduct; compliance with KYC norms; setting up of a robust grievance redressal mechanism to address grievances raised by customers, as per the guidelines.
 Irdai said IPPB will also have to put in place a system to identify the postman and grameen dak sevak who has sold an insurance policy. KPM ANU

Postmen, grameen dak sevaks may soon start selling insurance policies

In the wake of alleged Rs 6,100 crore foreign remittance scam through Bank of Baroda (<keyword id="92547" type="CITY" weightage="80" keywordseo="BoB">BoB</keyword>), the Central Vigilance Commission (<keyword id="47883" type="ORGANIZATION" weightage="60" keywordseo="CVC">CVC</keyword>) has asked the Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="100" keywordseo="RBI">RBI</keyword>) and Indian Banks' Association (IBA) to red flag multiple transactions of smaller amounts from a single account, ensuring compliance of KYC norms to check fraudulent forex transactions. 

	Vigilance Commissioner T M Bhasin has sent a letter to the central bank that if smaller forex transactions of less than one lakh dollars are being made than it should come to its notice.
 Similar communication has also been sent to IBA chief, saying there may be "attempts to camouflage generation of alerts by sending small amount of money through multiple transactions of <keyword id="6368276" type="COMPANY" weightage="60" keywordseo="Foreign-exchange">foreign exchange</keyword> abroad.” 

	At present, an alert is generated only when foreign exchange (forex) remittance is over one lakh dollars. 
 

	IBA has also been asked to inform all member banks that they follow Know Your Customer (KYC) and Anti-Money laundering (AML) guidelines so as to check re-occurence of incidents such as Bank of Baroda case. 
 The Enforcement Directorate (<keyword id="12163" type="COMPANY" weightage="60" keywordseo="Ed">ED</keyword>) has been asked to handle the case of about Rs 6,100 crore foreign remittance scam and if these were not genuine transactions then they should work on repatriation of the money. As soon as the BoB incident was reported to the CVC, requests for probe was made to the <keyword id="6354572" type="ORGANIZATION" weightage="100" keywordseo="CBI">CBI</keyword> and ED. 

	The transactions were made in about a period of about 14 months and 90% of them were through Real-Time Gross Settlement (RTGS) system, in which transactions are settled on real-time. 
 

	Both the Central Bureau of Investigation (CBI) and ED are probing transactions of Rs 6,100 crore to Hong Kong from a Bank of Baroda's Ashok Vihar branch here. 
 The huge transaction is believed to be trade-based <keyword id="6355008" type="UNKNOWN" weightage="100" keywordseo="money-laundering">money laundering</keyword> as the amount was transferred in the garb of payments for imports, that never took place. 

	As per CBI probe so far, Rs 6,100 crore were transferred through nearly 8,000 transactions done between July, 2014 and July, this year. 

	 
	 
	(Image: Indiatimes)

BoB scam: CVC tells RBI to red flag multiple forex transactions

After the RBI refused to share <keyword id="6355303" type="CITY" weightage="100" keywordseo="Bank-of-India">Bank Of India</keyword>’s <keyword id="6355008" type="UNKNOWN" weightage="100" keywordseo="money-laundering">money laundering</keyword> inspection reports with Central Economic Intelligence Bureau (CEIB), an apex intelligence agency under the <keyword id="47209" type="ORGANIZATION" weightage="20" keywordseo="Finance-Ministry">Finance Ministry</keyword>, the <keyword id="53099" type="ORGANIZATION" weightage="40" keywordseo="Law-ministry">Law Ministry</keyword> has advised Bank of India directly to cooperate. 
 The matter of non-sharing of inspection reports was discussed during a meeting of <keyword id="405461" type="ORGANIZATION" weightage="20" keywordseo="Economic-Intelligence-Council">Economic Intelligence Council</keyword> (EIC) headed by <keyword id="6355261" type="POSITION" weightage="40" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>. It was then decided to refer to the matter to Law Ministry for advice, they said. 

	The Law Ministry has recently opined that the provisions in the Banking Regulations Act, 1949 and other banking laws do not restrain RBI from sharing extracts of inspection or scrutiny report with law enforcement agencies or CEIB. 
 

	The Ministry's advice has been communicated to the RBI. 
 

	The RBI was required to share relevant extracts of inspection reports with law enforcement agencies and CEIB to check black money and other financial crimes where gross violations of Know Your Customer (KYC) guidelines and Prevention of Money Laundering Act are noticed, sources said. 
 

	RBI has communicated to the CEIB that it is examining the matter in consultation with its legal department. The RBI may share extracts of inspection reports with the bureau, the sources said. 
 

	RBI had objected to sharing the reports with CEIB on the ground that the latter was not a statutory body. The central bank, however, was sharing these reports with Intelligence Bureau (IB), which is also not a statutory body, they said. 
 

	The matter of misuse of Urban Cooperative Banks (UCBs), over which there is dual control by central and state governments, for money laundering has been a matter of concern for central intelligence agencies. Violations of banking laws by other banks have also been noticed, the sources said. 
 

	A total of 489 UCBs have come under the scanner of RBI, which has issued instructions to its regional offices to undertake scrutiny to ascertain compliance with Know Your Customer norms, besides Anti-Money Laundering and Combating the Financing of Terrorism guidelines, they said.

You Searched For "KYC compliance guidelines" and got 10 results

You need to do full KYC for mobile wallets too – but you can store twice the amount of money

Sanchita Dash

The RBI's new guidelines will allow you to transfer funds between different mobile wallets

Dilsher Dhillon

Mobile wallets are not happy with RBI’s latest draft guidelines. Here’s why

BI India Bureau

RBI slaps fine of Rs 2.91 crore on Axis Bank and HDFC Bank: All details

BI India Bureau

Vijay Shekhar Sharma: The controversies of the architect of fintech

PTI

WazirX has been asked to explain ₹2,971 crore of crypto transactions allegedly used to launder money

Rounak Jain

Postmen, grameen dak sevaks may soon start selling insurance policies

PTI

BoB scam: CVC tells RBI to red flag multiple forex transactions

BI India Bureau

Bank of India advised by Law Ministry to share money laundering case reports

BI India Bureau

Check out the more than 50 pitch decks fintechs used to raise millions in funding from top investors

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