RBI Imposes Monetary Penalty on American Express:

RBI Imposes Monetary Penalty on American Express The Reserve Bank of India (RBI) issued an order dated October 01, 2025 to impose a penalty in powers given by RBI provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949. RBI imposed a monetary penalty of Rs 31.80 lakh on American Express Banking Corp. for non-compliance with a few directions of the Reserve Bank of India (Credit Card and Debit Card-Issuance and Conduct) Directions, 2022.

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The Reserve Bank of India (RBI) conducted the Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank, looking at its financial position as of March 31, 2024. During the inspection, RBI found that the bank had not fully complied with certain RBI directions. Based on these findings and the related correspondence, RBI issued a notice to the bank asking it to explain why a penalty should not be imposed for failing to follow the directions. After reviewing the bank’s written response, additional submissions, and oral arguments made during a personal hearing, RBI concluded that one charge against the bank was valid and required a monetary penalty: The bank had not taken steps to return credit balances to some credit cardholders that arose from refunds, failed transactions, or reversed transactions.

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RBI clarified that this action relates only to regulatory compliance issues and does not question the validity of any transactions or agreements between the bank and its customers. The monetary penalty is imposed without affecting any other actions RBI may take against the bank in the future.