Violation of norms: RBI imposes fine on ICICI, Kotak Mahindra Bank

Mumbai: The Reserve Bank of India (RBI) on Tuesday slapped a fine of Rs 12.19 crore on ICICI Bank Ltd and a Rs 3.95 crore fine on Kotak Mahindra Bank Ltd, citing violation of official norms.

In a statement, the central bank said, "The penalty on ICICI Bank was imposed for contravention of sub-section (1) of Section 20 of the Banking Regulation Act, 1949 (the BR Act) read with directions issued by RBI on 'Loans and Advances-Statutory and Other restrictions', sub-section (2) of Section 6 and Section 8 of the BR Act read with directions issued by the RBI on ‘Financial Services provided by the Banks’, and non-compliance with the RBI directions on ‘Frauds classification and reporting by commercial banks and select Fls".

For Kotak Mahindra Bank, the penalty has been imposed for non-compliance with official directions on "Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks", "Recovery Agents engaged by Banks", "Customer Service in Banks', and "Loans and Advances - Statutory and Other Restrictions," it said.

According to RBI, the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the two banks with their customers.

With inputs from IANS