Markets regulator Sebi today imposed a penalty of Rs 40 lakh on depository participant BOI Shareholding Ltd for not taking "adequate and appropriate" steps to comply with the anti-money laundering regulations.
It was alleged that BOI Shareholding's PMLA (Prevention of Money Laundering Act) policy did not contain mandatory anti-money laundering procedures relating to client risk categorisation, suspicious transaction monitoring and its reporting.
To examine the practices and systems put in place by BOI Shareholding with regard to prevention of money laundering and related compliance aspects, Sebi carried out an inspection of books and accounts and other records of the depository participant from October 2012 to March 2015.
Sebi found that the depository participant did not amend its anti-money laundering (AML) policy or procedure to give effect to provision of PMLA.
In an order passed today, Sebi Adjudicating Officer Rachna Anand said the depository participant "did not take adequate and appropriate measures to abide by the spirit of anti-money laundering measures and requirements as enshrined in the PMLA" as well as the rules pertaining to AML and Beneficial Ownership.
However, the Adjudicating Officer said that discrepancies pointed out in the inspection were rectified by depository participant by February 2016 but there was an "inordinate" delay of five years on its part in complying with the rules.
Accordingly, Securities and Exchange Board of India (Sebi) has slapped a fine of Rs 40 lakh on it.
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