Banking News

RBI fines ICICI, Kotak Mahindra Bank for not complying with norms

The Reserve Bank of India has slapped fines of ₹12.19 crore on ICICI Bank and ₹3.95 crore on Kotak Mahindra Bank for non-compliance with various central bank directions.

ICICI Bank has been penalised for contraventions pertaining to loans and advances-statutory and non-compliance with RBI directions on fraud classification and reporting, the central bank said on Tuesday.

Kotak Mahindra Bank has been fined for non-compliance with directions on managing risks and the code of conduct in outsourcing of financial services by banks as well as failure to comply with RBI directions on recovery agents and customer service.

In ICICI Bank’s case, examination of risk assessment reports showed that the lender had sanctioned loans to companies in which two of its directors were also directors, marketed the sale of non-financial products and failed to report frauds to the RBI within mandatory timelines.

Kotak Mahindra Bank, meanwhile, had failed to carry out due diligence of a service provider and was also unable to ensure that customers were contacted after 7 p.m. and before 7 a.m., the RBI said. Kotak had also levied foreclosure charges despite there being no clause in loan agreements for prepayment penalties on loans.

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