RBI Imposes ₹62 Lakh Penalty On Kotak Mahindra Bank For Regulatory Lapses
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The central bank said the violations relate to basic savings accounts, business correspondents and incorrect credit data reporting.
The Reserve Bank of India has imposed a monetary penalty of ₹61.95 lakh on Kotak Mahindra Bank for non-compliance with multiple regulatory directions. The action was confirmed by the RBI through an official press release, stating that the penalty was imposed through an order dated December 11, 2025.
According to the RBI, the penalty follows a Statutory Inspection for Supervisory Evaluation (ISE 2024) conducted with reference to the bank’s financial position as on March 31, 2024. During the inspection, the central bank found several lapses in compliance with its guidelines.
One of the key violations involved the opening of Basic Savings Bank Deposit (BSBD) accounts. The RBI said Kotak Mahindra Bank had opened additional BSBD accounts for certain customers who already held such accounts with the bank, which is not permitted under existing norms.
The inspection also revealed irregularities in the bank’s engagement with Business Correspondents (BCs). The RBI noted that the bank had entered into arrangements with business correspondents for activities that were beyond the permitted scope defined under regulatory guidelines.
In addition, the bank was found to have furnished inaccurate information relating to certain borrowers to Credit Information Companies (CICs), violating provisions of the Credit Information Companies Rules, 2006.
The RBI clarified that it had earlier issued a show-cause notice to Kotak Mahindra Bank regarding these lapses. After examining the bank’s replies and additional submissions, the regulator concluded that the charges were sustained and warranted the imposition of a monetary penalty.
The central bank emphasised that the action is based on deficiencies in regulatory compliance and does not call into question the validity of any transactions or agreements entered into by the bank with its customers. It also stated that the penalty would not have any direct impact on customer operations or services.
Kotak Mahindra Bank has disclosed the regulatory action to stock exchanges, in line with listing requirements. Market participants are expected to watch the bank’s stock performance closely, especially after the shares closed lower in the previous trading session. As of the last close, Kotak Mahindra Bank’s shares were trading around ₹2,159, with a market capitalisation of approximately ₹4.29 lakh crore. Over the past year, the stock has delivered returns of about 24 per cent, despite periodic regulatory scrutiny.
The RBI reiterated that such penalties are part of its ongoing supervisory framework to ensure adherence to banking norms and to strengthen compliance standards across the financial system.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Regulatory actions and market movements are subject to change based on official disclosures and market conditions.
