ICICI Bank and Kotak Mahindra Bank Fined by RBI for Rule Violations

The Reserve Bank of India (RBI) has decided to slap a penalty of Rs. 12 crore 19 lakh on ICICI Bank for failing to follow rules to the code of conduct for the bank”s directors and fraud reporting. According to the RBI”s inspection reports, ICICI Bank sanctioned and committed loans in which two of the bank”s directors hold the same position.

The bank also marketed and engaged in the sale of non-financial products, violating fraud reporting as they failed to report the same with the regulator within the prescribed timeline of over three weeks after the anomaly was detected. These measures have been taken following inspections conducted during the financial years FY 2020 and FY 2021.

In a similar case, RBI fined private lender Kotak Mahindra Bank a sum of Rs. 3.95 crore for failing to conduct an annual review of service providers as mentioned in the terms of sanction. The bank also failed to ensure that recovery service agents did not contact customers between 7 pm and 7 am, which is contrary to RBI”s directions.

These violations were detected during regulatory inspections for the financial year ending March 2022.