New Delhi: In a move to uphold financial integrity, the Reserve Bank of India (RBI) has imposed fines on two leading private banks, Kotak Mahindra Bank and ICICI Bank, for regulatory non-compliance.
Kotak Mahindra Bank was fined Rs 3.95 crore for failing to perform an annual review of its service provider, violating contact hours with customers, and charging interest from the disbursement due date. The bank was also reprimanded for imposing foreclosure charges without a specified prepayment penalty clause.
ICICI Bank, on the other hand, was fined Rs 12.19 crore for committing loans to companies with two of its directors on the board, marketing non-financial products, and not promptly reporting fraud to the RBI. These actions were deemed serious violations, leading to administrative sanctions.
The RBI has clarified that these penalties are for contravention of various sections of the Banking Regulation Act, 1949, and non-compliance with its directions on multiple aspects of banking operations.
It is important to note that these penalties are related to regulatory compliance issues and do not pass judgment on the legitimacy of specific transactions or arrangements between the banks and their customers.