Reserve Bank of India has imposed a monetary penalty amounting to Rs. 1.91 crore on the Axis Bank for the contravention of provisions of Section 19 (1) (a) of the Banking Regulation Act, 1949; and non-compliance with certain directions issued by RBI on ‘Interest Rate on Deposits’, ‘Know Your Customer (KYC)’ and ‘Credit Flow to Agriculture- Collateral free agricultural loans’, according to exchange filling.
| Details of the violation(s) /contravention(s) committed oralleged to be committed |
| Opening savings deposit accounts inthe name of ineligible entities |
| Allotting multiple CustomerIdentification Code to its individualcustomers instead of a Unique CustomerIdentification Code for each customer |
| Obtaining collateral security foragricultural loans of value less than Rs.1.6 lakh |
| Undertaking non-permissible business of‘providing technology services’ by oneof the wholly owned subsidiaries of theBank |
This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulations Act, 1949 and emanates from statutory inspections for supervisory evaluation for FY23. The Statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023 and a review of activities of its subsidiary company was carried out by RBI, according to central bank’s press release.
Based on supervisory findings of contravention of provisions of BR Act and non-compliance with the RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the provisions of BR Act and RBI directions.
