New Delhi: The Reserve Bank of India (RBI) has imposed monetary penalties on Axis Bank Limited and HDFC Bank Limited for not complying with various regulatory rules. The fines were announced on Tuesday, September 10, 2024.
RBI's Penalty On Axis Bank
Axis Bank was fined Rs 1.91 crore on September 3, 2024, following a statutory inspection based on its financial position as of March 31, 2023. The inspection, known as the supervisory evaluation (ISE 2023), revealed that the bank violated certain sections of the Banking Regulation Act, 1949.
According to the RBI, Axis Bank allowed ineligible entities to open savings accounts, failed to provide unique customer identification codes (UCIC), and did not properly secure collateral for agricultural loans of up to Rs 1.60 lakh. Furthermore, a fully-owned subsidiary of the bank acted as a technology service provider, which is not allowed for banks under current regulations.
RBI's Penalty On HDFC Bank
Similarly, HDFC Bank was fined Rs 1 crore for failing to comply with certain RBI guidelines related to interest rates on deposits, use of recovery agents, and customer service. The violations were discovered during a statutory inspection conducted with reference to the bank’s financial position as of March 31, 2022 (ISE 2022).
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The RBI noted that HDFC Bank offered gifts, such as paying the first-year premiums for life insurance beyond the Rs 250 limit, opened accounts for ineligible entities, and did not follow guidelines on customer contact outside permitted hours.
The central bank clarified that these penalties are to address regulatory lapses and do not impact the validity of any transactions or agreements made by the banks.
On the stock market, Axis Bank's shares closed at Rs 1,187.00, up 1.40 per cent, while HDFC Bank's shares ended at Rs 1,650.60, rising 0.19 per cent on the BSE.
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