RBI imposes Rs.16.14 Crore Monetary Penalty on Kotak Mahindra Bank and ICICI Bank

The Reserve Bank of India (RBI) has imposed a Monetary penalty of Rs.16.14 Crore on Kotak Mahindra Bank and ICICI Bank for non-compliance with RBI Directions.

RBI imposed a monetary penalty of Rs.3.95 crore on Kotak Mahindra Bank Limited (the bank) for non-compliance with RBI Directions on “Managing Risks and Code of Conduct in Outsourcing of Financial Services by Banks”, “Recovery Agents engaged by Banks”, “Customer Service in Banks”, and “‘Loans and Advances – Statutory and Other Restrictions’”.

ICICI Bank was penalized with monetary penalty of Rs.12.19 crore for contravention of sub-section (1) of Section 20 of the Banking Regulation Act, 1949 (the BR Act) read with directions issued by RBI on ‘Loans and Advances-Statutory and Other restrictions’, sub-section (2) of Section 6 and Section 8 of the BR Act read with directions issued by the RBI on ‘Financial Services provided by the Banks’, and non-compliance with the RBI directions on ‘Frauds classification and reporting by commercial banks and select Fls’.

This penalty has been imposed in the exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Sections 46 (4)(i) of the Banking Regulation Act, 1949.

This action is based on regulatory compliance deficiencies and is not intended to rule on the validity of any transaction or agreement entered into by the bank with its customers.