RBI Imposes Penalties on Axis Bank, J&K Bank, and Bank of Maharashtra

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.5 crore on Jammu & Kashmir Bank for non-compliance with certain directions issued by the RBI. The penalty relates to the bank’s failure to adhere to RBI’s guidelines on the central repository of large common exposures across banks, loans, and advances, as well as statutory and other restrictions. Additionally, the bank did not ensure the timely implementation and strengthening of SWIFT-related operational controls. The RBI’s statutory inspection conducted on March 31, 2021, revealed non-compliance with these directions.

Axis Bank Fined for Violating RBI Guidelines on Credit Card Accounts

Axis Bank has been levied a monetary penalty of Rs 30 lakh by the RBI for non-compliance with certain provisions of the RBI’s directions on Prudential Norms on Income Recognition, Asset Classification, and Provisioning pertaining to Advances – Credit Card Accounts. The penalty stems from the bank charging penal fees on certain accounts for late payment of credit card dues, even though the customers had made timely payments through third-party platforms.

Bank of Maharashtra Penalized for Breaching RBI’s Directives on Loans and ATMs

The RBI has imposed a monetary penalty of Rs 1.45 crore on Bank of Maharashtra for non-compliance with specific directions issued by the RBI. The penalty pertains to the bank’s failure to adhere to RBI’s guidelines on Loans and Advances – Statutory and Other Restrictions, as well as the Advisory on Man in the Middle (MiTM) Attacks in ATMs.

During the RBI’s inspection, it was discovered that the bank had sanctioned a term loan to a corporation without conducting proper due diligence on the viability and bankability of the projects for which the loan was provided. Furthermore, the bank failed to implement the required control measures for ATMs, specifically regarding the end-to-end encryption of communication between the ATM terminal/PC and the ATM Switch, within the prescribed timeline.

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