The Reserve Bank of India (RBI) on Tuesday (September 10) said it has imposed monetary penalties on two major banks, Axis Bank Ltd and HDFC Bank Ltd, for non-compliance with various regulatory directives. On September 3, 2024, Axis Bank was fined ₹1.91 crore, while HDFC Bank faced a penalty of ₹1 crore.

Axis Bank's penalty of ₹1.91 crore stems from findings during a statutory inspection for supervisory evaluation (ISE 2023). The inspection, conducted with reference to the bank's financial position as of March 31, 2023, revealed several contraventions of the Banking Regulation Act, of 1949.

According to the RBI, the bank opened savings deposit accounts for ineligible entities, failed to provide unique customer identification codes (UCIC), and improperly secured collateral for agricultural loans up to ₹1.60 lakh.

Additionally, a wholly-owned subsidiary of the bank acted as a technology service provider, which is not a permissible business that can be undertaken by a banking company.

In a similar move, HDFC Bank was fined ₹1 crore for non-compliance with certain directions issued by RBI on "interest rate on deposits, recovery agents engaged by banks and customer service in banks.”

The statutory inspection for supervisory evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as of March 31, 2022.

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First Published : September 10, 2024, 6:54:05 PM IST