RBI penalises Yes Bank & IDFC Bank for violations

Data of over 32 lakh debit cards, including 6 lakh cards of State Bank of India alone among other banks, used at about 80 ATMs were suspected to have been compromised. The suspected security breach happened through a malware in the systems of Hitachi Payments Services, which served Yes Bank.

In a separate statement, RBI said, "The Reserve Bank of India (RBI) has imposed on October 23, 2017, a monetary penalty of ₹20 million (Rs 2 crore) on IDFC Bank (the bank) for contravention of regulatory restrictions pertaining to loans and advances."

The status report of IDFC Bank based on its financial position as on December 31, 2016, revealed, inter alia, non-adherence with certain directions pertaining to sanction / renewal of loans and advances. Based on the status report, a notice was issued to the bank dated August 07, 2017, advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI, it said.

This penalty has been imposed in exercise of powers vested in RBI under the provisions of the Banking Regulation Act taking into account failure of the bank to adhere to certain directions issued by RBI.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by the bank with its customers, the banking regulator added.
After considering the bank’s replies, oral submissions made in the personal hearings, as also the additional information and documents furnished, the RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.