Rbi Slaps Fines On Axis Bank, Idbi Bank

The Reserve Bank has imposed a monetary penalty of ₹93 lakh on Axis Bank and ₹90 lakh on IDBI Bank.

On Friday, Axis Bank shares closed 0.5% higher at ₹796.10 apiece on NSE, while IDBI Bank shares closed 0.21% lower at ₹47.65.

In the case of Axis Bank, the RBI has imposed a monetary penalty for non-compliance with the directions issued by RBI on loans and advance, KYC guidelines and penalties on non-maintenance of minimum balance in savings accounts.

RBI said Axis Bank violated certain norms by not maintaining the prescribed margin in case of intraday facilities sanctioned to stockbrokers.

“The Bank also followed restrictive practices in sale of insurance products to customers, failed to verify the copy of officially valid documents so produced by the clients, with the originals, while establishing account based relationships, had instances of customer IDs having multiple CIFs instead of a Unique Customer Identification Code (UCIC), and levied penal charges for non-maintenance of minimum balance in savings bank accounts, not directly proportionate to the extent of the shortfall observed,” RBI said.

In the case of IDBI Bank, RBI said the lender reported frauds with delay and submitted flash reports in respect of frauds involving an amount of ₹5 crore and above to RBI with delay and failed to implement time restrictions on holidays and data access control for corporate net banking to put through fund transfer resulting in unauthorized debit transactions in the account of two co-operative banks.

The RBI had issued notices to both the banks advising it to show cause, as to why penalty should not be imposed on it for non-compliance with the directions.

After considering the banks’ reply to the notice and oral submissions, RBI came to the conclusion that the charges of non-compliance with the directions were substantiated and warranted imposition of monetary penalty.

This action is 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 bank with its customers, RBI said.

IDBI Bank, in a statement said, it has put in place necessary corrective actions to strengthen its internal control mechanisms so as to ensure that such incidents do not recur.