RBI has imposed a penalty of Rs 90 lakh on IDBI Bank and Rs 93 lakh on Axis Bank.
RBI Report: The Reserve Bank of India (RBI) has imposed a penalty on private lenders Axis Bank and IDBI Bank. According to an official statement issued by the central bank on Friday, RBI has imposed a penalty of Rs 93 lakh on Axis Bank and Rs 90 lakh on IDBI Bank. On Friday, on the NSE, the share of Axis Bank was up 0.5 per cent at Rs 796.10, while the share of IDBI Bank was down 0.21 per cent to close at Rs 47.65.
Axis did not follow many rules including loan and KYC
(Axis Bank) In the case of Axis Bank, the action has been taken by the bank for non-compliance with RBI guidelines on loans and advances, KYC guidelines and penalty for non-maintenance of minimum balance in savings accounts. RBI said that Axis Bank has violated certain norms by not maintaining the recommended margin in respect of intraday facilities allowed to stockbrokers.
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Axis issued several CIFs to customers
The Reserve Bank of India said, “The bank adopted restrictive procedures in the sale of insurance products to customers, as well as failed to verify the officially valid documents of the customers with the originals while opening the bank account. There were several CIF cases on customer IDs instead of a Unique Customer Identification Code (UCIC). Also, all the cases of levying charges for non-maintenance of minimum balance in the savings bank accounts of the bank were not proportionately correct.
Delay in reporting frauds
In the case of IDBI Bank, the RBI said that the lender reported the frauds with a delay. Also, late submission of flash reports in the case of frauds involving an amount of Rs 5 crore and above. The bank failed to enforce the timing restrictions on holidays. In addition, data access control for corporate net banking failed in case of unauthorized deposits in the accounts of two co-operative banks through fund transfers.
RBI had also issued show cause notices to both the banks in this matter.