Mumbai: India’s banking sector regulator, the Reserve Bank of India, Friday imposed financial penalties on Axis Bank Limited and IDBI Bank Limited for non-compliance with the rules and regulations and the Reserve Bank’s directions.
The penalty of Rs 93 Lakh has been imposed on Axis Bank for non-compliance with the directions issued by RBI on Loans and Advances – Statutory and Other Restrictions of the RBI and also for the non-compliance with the RBI’s directions on the know-your-customer (KYC) norms.
“This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act),” the RBI said on Friday evening.
RBI said a statutory inspection for supervisory evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report and all related correspondence pertaining to the same, revealed, inter-alia, non-compliance with the directions issued by RBI to the Axis Bank.
RBI said it issued a show cause notice to Axis Bank and after considering the bank’s reply to the notice and after hearing the oral submissions made additional submissions made by Axis Bank, it came to the conclusion that the charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.
This is not the first time when the RBI has imposed a financial penalty on Axis Bank for violation of rules and regulation and non-compliance with the Reserve Bank’s directions.
As reported earlier by ETV Bharat, the RBI had imposed a penalty of Rs 25 lakh on Axis Bank in September last year.
RBI slaps penalty on IDBI Bank
Today, the Reserve Bank also imposed a penalty of Rs 90 lakh on IDBI Bank Limited. This penalty has been imposed on IDBI for non-compliance with the RBI’s directions on reporting and classification of frauds and also for delaying the reporting of frauds to the Reserve Bank, among other things.
The RBI said that a penalty of Rs 90 lakh on IDBI Bank was imposed under the provisions of Section 47A (1) and (c) read with sections 46(4)(i) of the Banking Regulation Act, 1949.
The Reserve Bank said though its action on these two banks – Axis Bank and IDBI Bank was based on the deficiencies in regulatory compliance but it was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
