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The central bank will take action against erring banks under rules that require banks to know their customers and verify their credentials and credibility but needs a formal request from law enforcers.
Marine commandos of the Indian Navy said that they recovered several credit cards issued by Citibank, HSBC, ICICI Bank, Axis Bank, HDFC Bank and State Bank of Mauritius from the rucksack of a terrorist at the Taj Mahal hotel in Mumbai.
"KYC (Know Your Customer) norms already exist for opening a bank account or issuing a credit card and everyone has to follow it. It seems that someone has not followed it and there is a question of punishment for which there is a process,"
said a senior RBI official.
"I think they are currently caught up with criminal investigations and they will come to us with the reference on it," said the official, adding that RBI cannot rely on newspaper reports to initiate action.
KYC norms, which come under global efforts to crack down on money linked to narcotics or terrorism, is a procedure that banks are required to follow in order to establish the identity of a person before opening an account or issuing a credit card.
RBI norms lay down clearly what is required for banks to make sure that they are not dealing with suspicious customers.
"Banks should obtain all information necessary to establish the identity/legal existence of each new customer, based preferably on disclosures by customers themselves. Typically easy means of establishing identity would be documents such as passport, driving licence etc. However, where such documents are not available, verification by existing account holders or introduction by a person known to the bank may suffice," says the RBI guideline on KYC.
To see more of the Hindustan Times or to subscribe to the newspaper, go to http://www.hindustantimes.com. Copyright (c) 2008, Hindustan Times, New Delhi Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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