RBI Imposes ₹90.92 Lakh Penalty on Axis Bank

Penalty on Axis Bank

Axis Bank Ltd finds itself facing a substantial penalty of ₹90.92 lakh, courtesy of the Reserve Bank of India (RBI), which has identified multiple instances of non-compliance with crucial directives. This penalty encompasses various regulatory domains, including the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016,’ ‘Loans and Advances – Statutory and Other Restrictions,’ ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks,’ and ‘Code of Conduct for Opening and Operating Current Accounts.’

Breach of KYC Directions: Penalty on Axis Bank

The RBI, in an official statement, revealed that the penalties were the outcome of a thorough examination of reports such as the Risk Assessment Report, Inspection Report related to ISE 2022, Scrutiny Report, and relevant correspondence. A significant area of concern was Axis Bank’s inability to maintain records regarding customer identification and addresses in specific cases.

Persistent Customer Calls: Penalty on Axis Bank

Another highlighted violation was Axis Bank’s persistent calls to specific customers, causing not only privacy concerns but also indicating a failure to comply with prescribed guidelines.

Challenges with Recovery Agents

The regulatory authority pointed out that Axis Bank neglected to ensure the appropriate conduct of recovery agents dealing with delinquent borrowers. Furthermore, the bank failed to ensure the tape recording of content or text in calls made by recovery agents to certain customers, raising questions about adherence to ethical and legal standards.

Absence of Customer Declarations

A critical lapse identified by the RBI was the bank’s failure to obtain declarations from customers during the opening of current accounts. This omission not only pointed to a procedural lapse but also highlighted potential gaps in customer documentation.

Show Cause Notice and RBI’s Response

In response to these identified shortcomings, the RBI issued a show-cause notice to Axis Bank, compelling the institution to provide reasons why a penalty should not be imposed for non-compliance with regulatory directives. Following a comprehensive evaluation, which included the bank’s response, oral submissions during a personal hearing, and additional submissions, the apex bank concluded that the charges of non-compliance were well-founded.

Monetary Penalty Enforced

Exercising its powers under the Banking Regulation Act, 1949, the RBI proceeded to impose a monetary penalty of ₹90.92 lakh on Axis Bank. This penalty stands as a regulatory measure aimed at enforcing compliance with established guidelines and maintaining the integrity of the banking sector.


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