RBI Penalizes ICICI and Yes Bank: Fines for Rule Violations and Customer Charges
RBI Penalizes Two Private Banks
The Reserve Bank of India (RBI) has imposed penalties on two private banks. ICICI Bank has been fined ₹1 crore, while YES Bank has been fined ₹90 lakh for non-compliance with regulations related to loans and customer services.
During RBI’s investigation, it was found that ICICI Bank had disbursed loans to many companies without conducting proper due diligence in the financial year 2021-22. As a result, the bank had to face financial risk. YES Bank, on the other hand, has been penalized for violating customer service standards.
YES Bank had imposed penalties for zero-balance accounts and opening Interpol accounts for customers to route parking funds and customer transactions.
RBI Takes Action
When penalizing these two major banks, RBI cited violations of rules related to customer services, internal, and account-related regulations. The Reserve Bank of India conducted investigations into both cases and found that YES Bank and ICICI Bank were charging fees when there was no complete breakdown in customer accounts. Despite efforts to comply with regulations, many shortcomings have been identified.
Decline in Both Banks’ Shares
Today, both banks’ shares are witnessing a decline. At 12:25 PM, ICICI Bank’s share has decreased by ₹2.70 (0.24%) to trade at ₹1,127.10. Meanwhile, YES Bank’s share has dropped by ₹0.30 (1.30%) to trade at ₹22.75.
Penalty Imposed on Five Cooperative Banks in March
At the beginning of this year, RBI took action against five cooperative banks for non-compliance with regulations. The banking regulator conducted enforcement actions against these banks for failing to comply with banking regulations and customer protection.
The penalty was imposed on these banks for up to ₹9.25 lakh each due to non-compliance with banking regulations and customer protection.
The cooperative banks subjected to enforcement action include Havda District Central Co-operative Bank, Standard Urban Co-operative Bank, Excellent Co-operative Bank, Rajpalayam Co-operative Urban Bank, and Mandi Urban Co-operative Bank.
