The Reserve Bank of India (RBI) has imposed monetary penalties on three prominent banks — Kotak Mahindra Bank, IDFC First Bank, and Punjab National Bank — for non-compliance with various regulatory guidelines.
Kotak Mahindra Bank has been fined ₹61.40 lakh for violations of RBI’s ‘Guidelines on Loan System for Delivery of Bank Credit’ and ‘Loans and Advances – Statutory and Other Restrictions’. The penalty was imposed following an Inspection for Supervisory Evaluation (ISE 2023) conducted with reference to the bank’s financial position as of March 31, 2023.
RBI found that Kotak Mahindra Bank had failed to ensure that the outstanding ‘loan component’ met the specified percentage of sanctioned fund-based working capital limits for certain borrowers and had also not complied with margin requirements for intra-day limits extended to certain stock-brokers.
IDFC First Bank has been penalised ₹38.60 lakh for non-compliance with RBI’s Know Your Customer (KYC) guidelines. A regulatory scrutiny found that the bank had failed to carry out the required Customer Due Diligence process while opening current accounts for certain sole proprietary firms.
Punjab National Bank (PNB) faced a penalty of ₹29.60 lakh for non-compliance with RBI’s directions on ‘Customer Service in Banks’. The central bank observed that the bank had levied penal charges for non-maintenance of minimum balance in inoperative accounts, which is in violation of the prescribed norms.
In each case, RBI issued show-cause notices to the respective banks after identifying the violations during regulatory evaluations. The penalties were imposed after considering the banks’ replies, additional submissions, and personal hearing representations.
RBI clarified that the actions are based on deficiencies in regulatory compliance and are not intended to question the validity of any transactions or agreements the banks may have entered into with their customers.
