look news india
The Financial Intelligence Unit (FIU) has imposed a fine of over ₹16 million (about Rs 1.66 crore) on Axis Bank for “failing” to put in place a mechanism to detect and report suspicious transactions made at 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. This act empowers the director of the federal agency to impose a monetary penalty on a reporting entity (such as Axis Bank). If a director nominated by an entity on the board of directors or any of its employees does not comply with the obligations mandated under the said law, then the penalty can be imposed. There was no immediate response to a query sent to Axis Bank in this regard.
According to a summary of the order with PTI, the entire incident is related to a case in which “an employee of Axis Bank was accused of being involved in a massive fraud and corruption scam in collusion with others.” The FIU order said the “alleged misconduct relates to the opening of a fake bank account in the name of government agency National Security Guard (NSG).”
The order said, “The report indicates that a manager of Axis Bank played a role in opening this account, the alleged purpose of which was to collect illegal money.” The order said that the FIU has imposed a total penalty of Rs 1,66,25,000 against the bank on alleged charges of violation of the Anti Money Laundering Act. The FIU, an agency under the Union Finance Ministry, is entrusted with the task of enforcing certain sections of the Anti Money Laundering Act like the Enforcement Directorate (ED).