9911796707
TMI Blog2025 (5) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... total of 9 CTRs in respect of 35 integrally connected cash transactions for the two accounts and penalty of Rs. 1,00,000/- on the bank for its failure to put in place an effective internal mechanism for detection and reporting of suspicious transactions along with the directions for the compliance as mentioned therein. 2. As per the facts of the case, the Reserve Bank of India had shared with FIU-IND an extract of their inspection findings in respect of the Bank. The gist of the said Inspection Report, inter alia, read as follows: "The Bank had not submitted CTR returns to FIU-IND, New Delhi. It was observed that in many current and OD accounts, there were transactions of more than Rs. 10.00 Lakhs in cash on a daily basis (e.g. S.N. Sala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has claimed to have submitted the revised statements to with FIU-IND, New Delhi on April 5, 2016 and has further, claimed that due to technical incompetency the Bank had not been able to capture information of the borrower or account holder to be analysed and reported under CTRs and STRs. In compliance with the principles of natural justice, the Bank was granted an opportunity of personal hearing before the Director, FIU on November 5, 2018 and the same was communicated to the Bank another letter number F.No. 9-21/Misc Corr/FIU-IND/35 dated October 24, 2018. Vide the said letter dated October 24, 2018, the Bank was also advised to furnish to FIU-IND, New Dells the details of the mechanism the Bank has put in place for detection and report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e their letters dated October 2008 and November 2, 2018, and in addition, made the following submissions on behalf of the Bank: a. The authorized representatives of the Bank admitted that the Bank has failed to furnish 9 (nine) CTRs in respect of two accounts namely, S.N. Salar and Abul Barkat Traders. b. The authorized representatives of the Bank also admitted that the Bank has no system of alert generation and no Red Flag Indicators (RFIs) have been implemented in their CBS. c. The authorized representatives further admitted that the English version of the AML Policy of the Bank submitted to FIU-IND, New Delhi vide e-mail dated January 7, 2019 lacked relevant details and robustness. Subsequently, the Bank has submitted letter numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a total of 10 integrally connected cash transactions relating to Abdul Barkat Traders, where the monthly aggregate exceeded Rs. 10.00 Lakhs in a month from April 2013 to October 2013 have not been reported by the Bank which are as under: Months for which CTRs alleged to not have been reported as per the SCN Transactions Number of transactions that should have been reported in terms of Rule 3(1)(B) of the PML Rules, 2005 Total number of CTRs not reported by the Bank April 20, 2013 10,00,000 3,00,000 2 1 August, 2013 2,92,000 10,00,000 50,000 2,40,000 4 1 September 2013 8,40,000 10,00,000 2 1 October 2013 1,25,000 10,00,000 2 1 Total 10 4 Accordingly, it was held that the Bank has failed to file a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t concealed any material fact. She further argued that the said transactions related to the period from April, 2013 to February, 2014 and hence being a small bank, the appellant was entitled for only a warning as per Section 13(2)(a) of PMLA, 2002, instead of imposing hefty penalty. Seeing the fact that the appellant bank is not a habitual defaulter and has updated its systems. She further argued that the appellant bank will collapse in case the said penalty is maintained. Prayer is accordingly made to set aside the impugned order qua the penalty imposed on the appellant bank. 4. On the other hand, Ld. Counsel for the respondent FIU submitted that the Director, FIU has already taken a lenient view by imposing the penalty on the basis of nu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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