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Brief
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- Union Bank of India, operating as a bank, is a "reporting entity" under Section 2(1)(wa) of the Prevention of Money Laundering Act (PMLA), 2002, and is registered with FIU-IND.
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- A comprehensive review by FIU-IND uncovered irregularities related to KYC/AML compliance in Union Bank's operations, particularly with current accounts maintained at its Hill Road Branch, Mumbai.
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- The review revealed substantial circular fund transfers orchestrated through entities under common control, raising concerns about the bank's due diligence and monitoring.
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- Despite generating high volumes of transactions and alerts, only one Suspicious Transaction Report (STR) was filed, and these alerts were often closed with minimal justification, indicating inadequate handling of transactions and alerts.
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- Based on observations and material available on record, Union Bank of India was issued a detailed Notice for non-compliance with Section 12 of the Act, read with relevant Rules, following which the Director FIU-IND imposed a total fine of ?54,00,000 (Rupees Fifty Four Lakh Only) on the bank.
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- The order also directed the bank to undertake measures such as comprehensive review of due diligence procedures, reassess its internal mechanism and transaction monitoring approach, and enhance diligence for newly opened accounts with inconsistent transaction volumes and velocities.
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