RBI penalized ICICI and YES Bank for Non-Compliance with Directions

The Reserve Bank of India (RBI) has imposed penalties of Rs.1.91 Lakhs on ICICI Bank and Yes Bank for non-compliance with certain RBI directions.

ICICI Bank was fined Rs.1 crore for non-contravention of RBI direction on “Loans and Advances – Statutory and Other Restrictions”. RBI found during the inspection that they didn’t properly check the viability of projects before approving the term loans, which led to financial risks. This lack of due diligence on debt-serving obligations caused the imposition of penalty on this bank.

Similarly, a Monetary penalty of Rs.91 Lakh was levied on Yes Bank for violating RBI guidelines on ‘Customer Service in Banks’, and ‘Un-authorized Operation of Internal/Office Accounts’ and also found charging fees on accounts with insufficient balances and using internal accounts for unauthorized activities.

This Penalty was imposed following ISE 2022’s Statutory Inspection for Supervision Evaluation, which unearthed the cases where the bank charged fees for failing to maintain minimum balances on certain savings accounts and used its internal account in an unauthorized manner.

The RBI said that the bank charged fees on savings accounts that didn’t have enough money and created fake accounts in customers’ names to move and store money without permission.

After the announcement, ICICI Bank’s shares dropped to Rs 1,129.15 and Yes Bank’s shares dropped to Rs 23.04 on BSE.