RBI wants banks to screen prospective staff

Business Standard
Our Banking Bureau
Mumbai
April 14, 2006

Banks would soon have to do a background check of candidates before recruiting them as employees. The Reserve Bank of India (RBI) is working on guidelines, making it mandatory for banks to run a check on the background of prospective employees. The background checking will be as per requirements of the financial action task force (FATF) on anti-money laundering (AML).

Speaking at a seminar on anti-money laundering organised by the Indian Banks’ Association (IBA), Lalit Srivastava, RBI general manager, said as per FATF guidelines, the RBI had already asked banks not to outsource the task of customer identification as per know your customer norms to direct selling agents (DSAs).

On lessons learnt from the recent IPO scam, Srivastava said penal action against banks found guilty in IPO allotment scam should not be evaluated on the basis of amount of penalties. The penalty for continued non-compliance could cost a bank heavily in its dealings in the international market and with its correspondent banks...

Labels: background checks, money laundering