Reserve Bank of India on 4 July imposed a monetary penalty of ₹1.05 crore on Kotak Mahindra Bank for non-compliance, related to customer protection, loan and advances, and other norms.
“The Reserve Bank of India (RBI) has, by an order dated June 29, 2022, imposed a monetary penalty of ₹1,05,00,000/- on Kotak Mahindra Bank Limited (the bank) for contravention of the provisions of sub-section (2) of Section 26A of the Banking Regulation Act, 1949 (the Act),” the RBI statement said.
The apex bank also mentioned that the ‘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’s these penalties are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, it noted.
“In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of the provisions of the Act and failure to comply with the directions issued by RBI, as stated therein,” the RBI said in its press release.
Penalties have also been imposed on Nav Jeevan Co-operative Bank, Balangir District Central Cooperative Bank Limited, Balangir, Dhakuria Cooperative Bank Ltd, Kolkata, and The Palani Co-operative Urban Bank Limited (No. A.331), Palani. The penalty ranges between Rs 1 lakh and Rs 2 lakh.
What for Indusind Bank
An RBI inspection report revealed that IndusInd Bank did not adhere to the customer due diligence procedure in the accounts opened using one-time password-based e-KYC, in non-face-to-face mode as in certain accounts, the aggregate of all credits in a financial year, in all the deposits taken together, exceeded Rs 2 lakh. Moreover, certain fixed deposit accounts were opened for amounts exceeding Rs 1 lakh, of which some deposits were for more than Rs 2 lakh, it said.
Its actions were not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the central bank said.
The RBI has increased the scrutiny of regulated entities to ensure that appropriate corporate governance practices are followed.
The banking regulator, on June 24, had imposed a monetary penalty of Rs 57.50 lakh on Indian Overseas Bank for failing to report certain instances of frauds involving ATM card cloning and skimming to the RBI within three weeks from the date of detection.