New Delhi: The Reserve Bank of India (RBI) on Friday imposed a penalty of Rs 61.95 lakh on Kotak Mahindra Bank for non-compliance with certain directions issued by it on access to banking services, on basic
savings bank deposit accounts, the scope of activities to be undertaken of business correspondents (BCs), and for contravention of provisions of the Credit Information Companies Rules, 2006 (ClC Rules).
"This penalty has been imposed in exercise of powers conferred on the RBI under the provisions of section 47A(1)(c) read with section 46(4)(i) of the BR Act and section 25(1)(iii) read with section 23(4) of the Credit Information Companies (Regulation) Act, 2005," the central bank said in a release. The statutory inspection for supervisory evaluation (ISE 2024) of the bank was conducted by the RBI with reference to its financial position as on March 31, 2024.
"Based on supervisory findings of non-compliance with the provisions of RBI directions, CIC rules and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for its failure to comply with the said provisions of RBI directions and CIC rules," the RBI stated. After considering the bank’s reply to the notice and additional submissions made by it, the RBI said that it found the bank had opened another BSBD account of certain customers who were already holding a basic savings bank deposit account (BSBD) account in the bank.
Additionally, the bank entered into an arrangement with BCs for undertaking activities, which are not covered within the scope of activities that can be undertaken by BCs. Furthermore, according to the RBI, the bank furnished inaccurate information, in respect of certain borrowers, to Credit Information Companies (CICs).
This action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI clarified. "Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by the RBI against the bank," the RBI said.
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