Today's headline about 22 banks being fined for not complying with KYC norms will surely give many of us - who have been harassed at some point or the other on account of that law - perverse pleasure. Although at this point, the banks have been cleared of any money laundering-related wrongdoing, some lapses, like the non reporting of cash transaction reports and cash sales of gold for amounts greater than Rs.50,000, are surely cause for concern.
India recently drew praise from global watchdog FATF (Financial Action Task Force) for addressing several weaknesses in its regulatory mechanism to control terror financing and money laundering. Notwithstanding the low rate of conviction, this is encouraging news. But at the same time, banks' NPAs are raging; 39 listed banks reported a 51% rise in NPAs in FY 2012-13 over FY 2011-12. And stories of lending to dubious industrial houses are legend.
So obviously we have a lot of ground to cover on the KYC front as well as on knowing what our customers are all about. The fine is a mere slap on the wrist and stricter action is needed. That is likely to create collateral damage in the form of more procedural pain for individual customers. But that's a price that has to be paid.
India recently drew praise from global watchdog FATF (Financial Action Task Force) for addressing several weaknesses in its regulatory mechanism to control terror financing and money laundering. Notwithstanding the low rate of conviction, this is encouraging news. But at the same time, banks' NPAs are raging; 39 listed banks reported a 51% rise in NPAs in FY 2012-13 over FY 2011-12. And stories of lending to dubious industrial houses are legend.
So obviously we have a lot of ground to cover on the KYC front as well as on knowing what our customers are all about. The fine is a mere slap on the wrist and stricter action is needed. That is likely to create collateral damage in the form of more procedural pain for individual customers. But that's a price that has to be paid.
RSS Feed