Axis Bank Fined Rs 1.66 Crore Over NSG Fraud Case

The Financial Intelligence Unit imposed a fine of Rs 1.66 crore on Axis Bank for failure to detect and report suspicious transactions related to a fraudulent account created in the name of NSG. The bank allegedly violated anti-money laundering laws, leading to a comprehensive probe by FIU.

The Financial Intelligence Unit has penalized Axis Bank with a hefty fine of Rs 1.66 crore. The action was taken after the bank failed to implement a system to detect suspicious transactions involving a fraudulent account under the name of the National Security Guard (NSG).

Issuing an order under Section 13 of the Prevention of Money Laundering Act (PMLA) on June 3, the federal agency cited lapses in compliance by Axis Bank's designated director and employees. The investigation revealed the complicity of a bank employee in a large-scale fraud and corruption scandal.

The FIU highlighted Axis Bank's failure to close alerts and file Suspicious Transaction Reports (STRs) in due time, hindering the scrutiny process. Axis Bank has been directed to improve its transaction monitoring mechanisms and ensure stringent employee screening in adherence to the RBI's guidelines.