Lok Sabha Question No. 2294 (UNSTARRED), answered on 2016-07-29
Subject: Money Laundering in Banks
Ministry: FINANCE
Asked by: SANJAY SHAMRAO DHOTRE, BHARTRUHARI MAHTAB, RAHUL RAMESH SHEWALE

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO. 2294

TO BE ANSWERED ON FRIDAY, JULY 29, 2016

SHRAVANA 07, 1938 (SAKA)

## Money Laundering in Banks

2294. Shri Sanjay Dhotre, Shri Bhartruhari Mahtab and  Shri Rahul Shewale :

Will the Minister of FINANCE be pleased to state:

- (a) whether the cases of remittance of money abroad by various individuals/organisations through their  bank  accounts  contrary  to  the  provisions  of  the  Prevention  of  Money Laundering Act have come to the notice of the Government across the country in the recent past;
- (b) If so, the details thereof, bank and State-wise during each of the last three years and the current year;
- (c) The  number  of  bank  officials  found  involved  in  such  transactions  along  with  the action taken/being taken by the respective bank against them during the said period, bank-wise;
- (d) whether such remittance are not reported upon by the Auditors of the banks during the said period, if so, the details of such cases along with the action taken against such Auditors; and
- (e) the  other  steps  taken/being  taken  by  the  Government  to  prevent  occurrence  of  such cases in the country?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

- (a) Yes, Sir.
- (b) & (c)   As per Annexure

(d) & (e) For implementation of the Prevention of Money Laundering Act and Rules, etc., the Department of Banking Regulation, Reserve Bank of India has been issuing instructions to banks and other Regulated Entities (Res).  These instructions have been included in RBI's Master Direction DBR.AML.BC.No.81/14.01.001/2015-16 dated February 25,2016 on KYC Norms.  In terms of this Master Direction, the Regulated Entities(Res) of the Reserve Bank of India, including the banks, are required to follow certain customer identification procedure while  undertaking  a  transaction  either  by  establishing  an  account  based  relationship  or otherwise and monitor their transactions.

RBI  has  also  issued  Master  Direction  on  'Frauds  -  Classification  and  reporting'  vide RBI. DBS.CFMC.BC.No.1/23.04.001/2016-17 dated July 01,2016 containing all the details/aspects  relating  to  frauds.  The  same  is  also  available  on  the  website  of  RBI

i.e.www.rbi.org.in.    On  receipt  of  fraud  reports  from  banks,  various  aspects  related  to  the frauds are examined and concerned banks are advised to report the case to CBI/Police/SFIO, examine staff accountability, complete proceedings against the erring staff expeditiously, take steps to recover the amount involved in the fraud, claim insurance wherever applicable and streamline the system as also procedures so that frauds do not recur.

* * * * *

## Annexure

| Calender Year          | Name of the Bank             | No. of cases registered under PMLA   | Amount remitted outside India (Rs. in crore)   | State       |
|------------------------|------------------------------|--------------------------------------|------------------------------------------------|-------------|
| 2013                   | Nil                          | Nil                                  | Nil                                            | Nil         |
| 2014                   | 1. ICICI Bank                | 01                                   | 5395.75                                        | Gujarat     |
|                        | 2. Oriental Bank of Commerce | 01                                   | 56.51                                          | Maharashtra |
| 2015                   | 1. Bank of Baroda            | 01                                   | 6000                                           | Delhi       |
|                        | 2. Oriental Bank of Commerce | 01                                   | 600                                            | U.P         |
| 2016 (till 30.06.2016) | 1. Indus Ind Bank            | 01                                   | 304.35                                         | Maharashtra |

Investigations have prima-facie revealed involvement of bank officials in some of the cases.