State Bank Fined $7.5m by US Regulators

Namasthe NRI:

The State Bank of India was fined $7.5 million by the Federal Reseve and other US regulators for violations of the Bank Secrecy Act and failure to maintain complete books and records. The State Bank of India consented to the fine, without admitting to any of the allegations, the Fed said in a joint statement with the Federal Deposit Insurance Corporation and the New York State Banking Department.

Under the order, the bank also must ensure "full compliance with suspicious activity reporting," and enhance and improve policies to comply with US regulations on reporting currency and foreign transactions.

US bank regulators use suspicious activity reports from banks to monitor for illegal financial transactions, including those related to terrorist financing and money-laundering.

The US also requires reporting of any currency transaction over $10,000.

The order also requires the State Bank of India to tighten its procedures for accepting funds for transfer out of the United States by its "non-resident Indian" department in its US operations.

The joint order requires an independent review of State Bank of India's books, including an analysis of funds-transfer accounts dating back to January 1, 1998.

This review will determine whether records relating to transactions in these accounts are complete, and "identify and investigate suspicious or unusual activities, if any" conducted through these accounts.

After the independent review, which should be complete within 120 days, the bank must provide regulators with a plan that provides for determining whether currency and other transactions "are being conducted for illegitimate purposes."


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