RBI imposes Rs 3.95 crore fine on Kotak Mahindra Bank and Rs 12.19 crore fine on ICICI Bank

The Reserve Bank of India (RBI) has imposed heavy fines of Rs 12.19 crore and Rs 3.95 crore on ICICI bank and Kotak Mahindra Bank respectively over regulatory non-compliance. 

Kotak Mahindra bank has been reprimanded for flouting rules pertaining to managing risks and prescribed conduct for outsourcing financial services.  “The bank failed to carry out annual review / due diligence of the service provider, failed to ensure that customers are not contacted after 7 pm and before 7 am,  levied interest from disbursement due date instead of the actual date of disbursement, contrary to the terms & conditions of sanction and levied foreclosure charges despite there being no clause in the loan agreement for levy of prepayment penalty on loans recalled/foreclosure initiated by the bank,” the RBI stated. 

ICICI has breached directives of section 20 pertaining to loans and advances, financial services, fraud classification and reporting. “The bank had sanctioned/committed loans to companies in which two of its directors were also directors, marketed and engaged in the sale of non-financial product, and failed to report frauds to RBI within the prescribed timelines,” The RBI mentioned. ICICI Bank was fined an amount of Rs 58.9 crore in 2018 over non-compliance in RBI guidelines on sale of securities.