RBI imposes monetary penalty of Rs 90 lakh on Axis bank

Pune Pulse

RBI imposes monetary penalty of Rs 90 lakh on Axis bank

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By: Pune Pulse

November 17, 2023

Pune: The Reserve Bank of India (RBI) has, by an order dated November 02, 2023, imposed a monetary penalty of ₹90.92 Lakh (Rupees Ninety lakh and ninety-two thousand only) on Axis Bank Ltd for non-compliance with certain directions issued by the Reserve Bank of India (RBI).

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

As per information from a press release by RBI, this action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI concerning its financial position as of March 31, 2022. A scrutiny was also conducted by RBI involving an account. The examination of the Risk Assessment Report/Inspection Report about ISE 2022, Scrutiny Report and all related correspondence in that regard, revealed, inter alia, that the bank (i) failed to preserve records about the identification of customers and their address in certain cases, (ii) made persistent calls to some of the customers, (iii) failed to ensure appropriate behaviour of recovery agents with some of the delinquent borrowers and (iv) failed to ensure a tape recording of the content/text of the calls made by the recovery agents to some of the customers and (v) did not obtain declarations from the customer at the time of opening of current accounts. Consequently, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the directions issued by RBI, as stated therein.

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, RBI concluded that the aforementioned charge of non-compliance was substantiated and warranted the imposition of a monetary penalty.

Shreyas Vange