RBI Imposes Hefty Fines on ICICI and Kotak Mahindra: Uncover the Issue
Several regulatory infractions related to financial irregularities in the private sector have resulted in penalties for ICICI Bank amounting to INR 12.19 crore and for Kotak Mahindra Bank, a fine of INR 3.95 crore.
Mumbai: Bank customers often bear the brunt of penalties for defaults or any form of financial irregularities on a weekly basis. However, these penalties are not limited to customers alone; sometimes, even minor infractions by banks can result in hefty fines. The Reserve Bank of India (RBI) has taken stern actions against two leading banks for violations related to certain regulatory norms in the private sector.
According to a statement by the RBI, both ICICI Bank and Kotak Mahindra Bank have been penalized for violating banking norms related to loan and advances, asset classification, and reporting formats. The RBI has not only held customers liable for minor infractions but has also taken strict measures against these two banks, which are two of the leading banks in the country.
The Reserve Bank has issued a notice to ICICI Bank stating that the bank has been penalized for not following norms related to loans and advances and banking norms related to asset classification and reporting formats. Furthermore, Kotak Mahindra Bank has been penalized for not adhering to instructions related to outsourcing in financial services, risk management, and code of conduct. This action by the bank is also related to recovery agents named in banking norms. However, none of these penalties is related to any transaction or agreements with customers.
The RBI is indeed a regulatory institution that formulates banking norms and oversees their implementation by banks, which are supposed to adhere to them. If any bank deviates from these norms or breaches them, the RBI takes action against them. In many instances, the RBI has acted in the interest of customers and has initiated penalties against banks to protect the customers’ rights when banks have violated norms.
