The Reserve Bank of India (RBI) has imposed a fine of more than Rs 1 crore each on Kotak Mahindra Bank and IndusInd Bank. The Reserve Bank has imposed this penalty on these banks for not following the guidelines. RBI has imposed a penalty of Rs 1.05 crore on Kotak Mahindra Bank for contravention of the provisions of sub-section (2) of section 26A of the Banking Regulation Act.
The Reserve Bank on Monday said it has imposed a penalty of Rs 1 crore each on Kotak Mahindra Bank and IndusInd Bank for deficiencies in regulatory compliance. Apart from this, RBI has also imposed penalty on four co-operative banks.
The RBI stated that statutory inspections were conducted on March 31, 2018 and March 31, 2019, with reference to the financial position of the bank. After this, the RBI said in the report that after investigation, the provisions of the Act and the instructions issued by the RBI have been violated. Kotak Mahindra Bank has been fined Rs 1.05 crore for violation of certain norms relating to ‘The Depositor Education and Awareness Fund Scheme, 2014’ and non-compliance of directions on ‘Customer Protection-Limited Liability of Customers in Unauthorized’.
At the same time, the central bank has imposed a penalty of 1 crore for IndusInd Bank. This penalty has been imposed after statutory inspection and evaluation. RBI informed that non-compliance of the instructions in the Risk Assessment Report, Inspection Report with respect to its financial position as on March 31, 2020, was detected.
Simultaneously, it was stated by RBI that the bank has failed to comply with the Customer Due Diligence (CDD) process in the accounts opened using OTP based e-KYC. As in some accounts the sum total of all credits in a financial over all deposits taken in a year, exceeds the prescribed limit of Rs. 2 lakhs.
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fined them too
Nav Jeevan, Balangir District Central Co-operative Bank Ltd. Balangir; Dhakuria Co-operative Bank Ltd. Kolkata and Palani Co-operative Urban Bank Ltd. Palani have also been fined. The fine ranges between Rs 1 lakh to Rs 2 lakh. However, RBI said the penalty is based on deficiencies in regulatory compliance.