Axis Bank Fined Rs 1.91 Crore, HDFC Bank Fined Rs 1 Crore By RBI On THESE Charges

New Delhi: Reserve Bank Of India (RBI) has imposed Rs 2.91 crore monetary penalty on Axis Bank Limited and HDFC Bank Limited over non-compliance of the central bank's directives.

"The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty," said RBI.

RBI imposes monetary penalty on HDFC Bank Limited on the following grounds

- The bank gave gifts (in the form of paying first-year premium for the complimentary life insurance cover) costing more than Rs 250 to the depositors at the time of accepting certain deposits;

- The bank opened certain savings deposit accounts in the name of ineligible entities; and

- The bank failed to ensure that customers are not contacted after 7 pm and before 7 am.

RBI imposes monetary penalty on Axis Bank Limited on the following grounds

- The bank opened certain savings deposit accounts in the name of ineligible entities;

- The bank had allotted multiple customer identification code to certain customers instead of a Unique Customer ldentification Code (UCIC) for each customer;

- The bank had obtained collateral security for agricultural loans upto ₹1.60 lakh in certain cases; and

- A wholly owned subsidiary of the bank undertook business of technology service provider, which is not permissible business that can be undertaken by a banking company under Section 6 of the BR Act.

RBI said that the action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.