RBI imposes penalty on Axis Bank and 2 others for rule violations

Axis bank

The Reserve Bank of India (RBI) on June June 23 said it has imposed a monetary penalty of Rs 30 lakh on Axis Bank for non-compliance with certain provisions of the RBI directions.

These are related to Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Credit Card Accounts, the RBI said.

The statutory inspection of the bank conducted by RBI revealed that the bank had levied penal charges in certain accounts for late payment of credit card dues though the customers had paid the dues by the due date, through third-party platforms, the RBI said.

Subsequently, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the directions issued by RBI, the central bank said.

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with such directions, the RBI said.

Separately, the RBI also imposed penalties on Bank of Maharashtra and Jammu and Kashmir Bank for certain rule violations, the RBI said.

In the case of BoM, the RBI imposed a penalty of Rs 1.45 crore for violations related to sanctioning of certain loans and failure to implement required control measures for ATMs relating to end-to-end encryption of communication between the ATM terminal/PC and the ATM Switch, the RBI said.

In the case of Jammu and Kashmir Bank, the RBI imposed a penalty of Rs 2.5 crore for non-compliance relating to certain loan disbursals, the RBI said.