RBI Fines Axis Bank and HDFC Bank for Non-Compliance

The RBI has imposed fines on HDFC Bank for issues related to deposit regulations, customer service, and operational practices, including giving gifts exceeding ₹250 to depositors. Axis Bank's penalty stems from breaches of KYC norms, collateral requirements for agricultural loans.

Piyush Shukla Published On September 11th, 2024

The Reserve Bank of India (RBI) has levied fines on HDFC Bank and Axis Bank due to regulatory non-compliance. HDFC Bank has been fined ₹1.91 crore, while Axis Bank has received a ₹1 crore penalty. The penalties are imposed for violations of RBI directives related to deposit regulations, KYC norms, and agricultural loans.

HDFC Bank Penalty Details

Interest Rate on Deposits: Non-compliance with RBI directions.
Customer Service and Recovery Agents: Failures in adhering to guidelines on customer service and conduct of recovery agents.
Incentives to Depositors: Issuing gifts worth over ₹250 for new deposits, which contravenes regulatory standards.
Operational Issues: Opening savings accounts for ineligible entities and contacting customers outside permissible hours.

Axis Bank Penalty Details

Banking Regulation Act Violations: Non-compliance with various regulations including those on KYC and credit flow to agriculture.

KYC Compliance: Issuing multiple customer identification codes instead of a Unique Customer Identification Code (UCIC).

Agricultural Loans: Obtaining collateral for loans up to ₹1.60 lakh, contrary to RBI’s collateral-free loan provisions.

Subsidiary Operations: A subsidiary engaged in activities not permitted under the Banking Regulation Act.

RBI’s Statement on the Penalties

The RBI emphasized that these actions are based on deficiencies in statutory and regulatory compliance and do not affect the validity of transactions or agreements between the banks and their customers. The penalties are part of a broader review and do not preclude further actions by the RBI.