RBI Fines ICICI Bank & Kotak Mahindra Bank: Banking sector regulator Reserve Bank of India has imposed penalty on two private sector banks ICICI Bank and Kotak Mahindra Bank. RBI has imposed a fine of Rs 12.19 crore on ICICI Bank and Rs 3.95 crore on Kotak Mahindra Bank.
While giving information about the penalty, RBI said that this penalty has been imposed on both these banks due to non-compliance of regulatory rules. RBI has imposed a penalty of Rs 12.19 crore on ICICI Bank. This penalty has been imposed after allegations of violation of norms related to restrictions and fraud classification and reporting by banks related to loans and advances. Also, RBI has imposed a penalty on ICICI Bank for non-compliance with the instructions of RBI in fraud classification and reporting on behalf of commercial banks and selected financial institutions in providing financial services.
RBI has also announced to impose a penalty of Rs 3.95 crore on Kotak Mahindra Bank. Issuing a press release, RBI said that the penalty has been imposed on Kotak Mahindra Bank for not following the instructions related to risk management and code of conduct in outsourcing of financial services. This action is also related to the deficiencies in the recovery agent nominated by the bank, customer service and loan and advance provisions. The statutory audit of the bank was conducted on the basis of reference to the financial position of the bank as on March 31, 2022.
RBI found that the bank failed to conduct annual review of the service provider. It also failed to ensure that customers were not contacted after 7 pm and before 7 am. Contrary to the terms, interest has been charged from the due date of disbursement instead of the actual date of loan disbursement. Also, despite there being no provision for foreclosure charges in the loan agreement, foreclosure charges have been imposed.
According to RBI, the step of imposing penalty in both the cases has been taken on the lapses in compliance of regulatory provisions by the banks and is not intended to pass any judgment on the validity of any transaction or agreement of the bank with the customers. .
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