RBI Fines Axis Bank and HDFC Bank for Non-Government Reconstitutes Monetary Policy Committee Ahead of RBI Rate ReviewCompliance
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.
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.
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.
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