RBI Imposes Penalties On ICICI Bank, Kotak Mahindra Bank For Non-Compliance

The RBI has imposed Rs 12.19 crore monetary penalty on ICICI Bank and Rs 3.95 crore on Kotak Mahindra Bank

The RBI said the penalties are based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.

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The Reserve Bank of India (RBI) on Tuesday said it has imposed monetary penalty on ICICI Bank and Kotak Mahindra Bank for non-compliance of certain regulatory norms. According to the release, the central bank has imposed Rs 12.19 crore monetary penalty on ICICI Bank and Rs 3.95 crore on Kotak Mahindra Bank.

Kotak Mahindra Bank has been penalised as the lender failed to carry out annual review/due diligence of the service provider, failed to ensure that customers are not contacted after 7 pm and before 7 am, and levied interest from disbursement due date instead of the actual date of disbursement, contrary to the terms & conditions of sanction, according to the release.

Further, bank has also levied foreclosure charges despite there being no clause in the loan agreement for levy of prepayment penalty on loans recalled/foreclosure initiated by the bank, release added.

The RBI penalised ICICI Bank as bank had sanctioned/committed loans to companies in which two of its directors were also directors, marketed and engaged in the sale of non-financial product, and failed to report frauds to the RBI within the prescribed timelines, the central bank said in a release.

In both cases, the RBI said the penalties are based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.

On Thursday, the central bank imposed a penalty of Rs 5.39 crore on Paytm Payments Bank Ltd for non-compliance with certain provisions, including Know Your Customer (KYC) norms. The central bank also found non-compliance with certain provisions related to 'RBI Guidelines for Licensing of Payments Banks', 'Cyber security framework in banks' and 'Securing mobile banking applications including UPI ecosystem'.