MUMBAI: The RBI has imposed a document penalty of practically Rs 12.2 crore on ICICI Financial institution for violation of lending guidelines and delays in reporting fraud. The penalty on ICICI Financial institution is greater than the Rs 10-crore effective imposed on HDFC Financial institution in Could 2021 for irregularities in auto loans. The penality can be larger than the entire fines levied on personal banks in FY23, totalling Rs 12.17 crore.
RBI inspected the books of ICICI Financial institution in 2020 and 2021 to guage its monetary standing. Throughout the inspection, RBI discovered that the financial institution had given loans to firms the place two of the lender’s administrators held board positions — in violation of RBI pointers. The financial institution additionally marketed and offered non-financial merchandise, that are exterior the remit of a business financial institution.
Third, ICICI Financial institution didn’t report frauds to RBI in time. Following the detection of those irregularities, RBI served the financial institution a show-cause discover.
“After contemplating the financial institution’s reply to the discover, oral submissions made in the course of the private listening to and extra submissions made by it, RBI got here to the conclusion that the cost of non-compliance with the provisions of the Banking Regulation Act and RBI instructions was substantiated and warranted imposition of financial penalty on the financial institution,” the central financial institution mentioned.
The regulator has additionally fined Kotak Mahindra Financial institution practically Rs 4 crore for violating guidelines on threat administration, outsourcing, restoration brokers, and mortgage administration.
RBI inspected Kotak Financial institution’s monetary place as of March 2022. The regulator discovered a number of irregularities: The financial institution didn’t evaluation or test the operations of its service suppliers. The financial institution had additionally violated RBI instructions that clients shouldn’t be contacted after 7pm and earlier than 7am for mortgage restoration.
Different violation of client safety norms included charging curiosity from the date of mortgage approval fairly than the date of precise disbursement, which violates mortgage phrases. The personal financial institution was discovered to be levying a prepayment penalty on small debtors though the phrases of the mortgage didn’t have any provision for such fines.
After following the due technique of issuing a show-cause discover to Kotak Financial institution, RBI determined that the costs of non-compliance with RBI instructions was substantiated and warranted the imposition of penalty on the financial institution.
RBI inspected the books of ICICI Financial institution in 2020 and 2021 to guage its monetary standing. Throughout the inspection, RBI discovered that the financial institution had given loans to firms the place two of the lender’s administrators held board positions — in violation of RBI pointers. The financial institution additionally marketed and offered non-financial merchandise, that are exterior the remit of a business financial institution.
Third, ICICI Financial institution didn’t report frauds to RBI in time. Following the detection of those irregularities, RBI served the financial institution a show-cause discover.
“After contemplating the financial institution’s reply to the discover, oral submissions made in the course of the private listening to and extra submissions made by it, RBI got here to the conclusion that the cost of non-compliance with the provisions of the Banking Regulation Act and RBI instructions was substantiated and warranted imposition of financial penalty on the financial institution,” the central financial institution mentioned.
The regulator has additionally fined Kotak Mahindra Financial institution practically Rs 4 crore for violating guidelines on threat administration, outsourcing, restoration brokers, and mortgage administration.
RBI inspected Kotak Financial institution’s monetary place as of March 2022. The regulator discovered a number of irregularities: The financial institution didn’t evaluation or test the operations of its service suppliers. The financial institution had additionally violated RBI instructions that clients shouldn’t be contacted after 7pm and earlier than 7am for mortgage restoration.
Different violation of client safety norms included charging curiosity from the date of mortgage approval fairly than the date of precise disbursement, which violates mortgage phrases. The personal financial institution was discovered to be levying a prepayment penalty on small debtors though the phrases of the mortgage didn’t have any provision for such fines.
After following the due technique of issuing a show-cause discover to Kotak Financial institution, RBI determined that the costs of non-compliance with RBI instructions was substantiated and warranted the imposition of penalty on the financial institution.
)
