RBI Imposes Penalty on ICICI Bank and YES Bank
The Reserve Bank of India (RBI) has penalized ICICI Bank and YES Bank for violations of regulatory norms pertaining to their financial positions as of March 31, 2022. Following supervisory inspections, the RBI issued notices to both banks, which subsequently failed to provide satisfactory explanations for the identified lapses, leading to the imposition of penalties.
ICICI Bank has been fined Rs 1 crore for its improper loan practices. The bank sanctioned term loans to certain entities without conducting adequate due diligence on the viability and bankability of the projects. These loans were intended to substitute budgetary resources for specific projects, but were serviced using budgetary resources instead of project revenues. Moreover, ICICI Bank failed to ensure that the loans were allocated to specific, monitorable projects.
YES Bank has been penalized Rs 91 lakh for charging customers for not maintaining minimum balances in savings accounts with insufficient or zero balances, which violates RBI guidelines. Additionally, the bank operated internal accounts under customers’ names for unauthorized purposes such as parking funds and routing transactions.
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