The Reserve Bank of India (RBI) on Monday mentioned it has imposed financial penalties on Kotak Mahindra Bank and IndusInd Bank for failing to adjust to numerous rules.
Kotak Mahindra Bank was fined Rs 1.05 crore for non-compliance with instructions on limiting legal responsibility of consumers in unauthorised digital banking transactions, and statutory and different restrictions governing loans and advances.
The RBI imposed the effective on the financial institution after conducting statutory inspection with regards to its monetary positions as on March 31, 2018 and March 31, 2019. The examination revealed that in sure situations of unauthorised transactions, the financial institution had did not credit score the eligible quantity to the depositor training and consciousness fund inside the interval prescribed and to credit score the quantity concerned within the transactions to the purchasers’ account inside 10 working days from the date of notification by the shopper. Kotak Mahindra Bank was additionally discovered to haven’t maintained or utilized margin on advances to inventory brokers.
IndusInd Bank was fined Rs 1 crore for not following KYC instructions. A statutory inspection of the financial institution with regards to its monetary place as on March 31, 2020 revealed that the financial institution had failed to stick to the shopper due diligence process within the accounts opened utilizing one time password (OTP)-based e-KYC, within the non-face-to-face mode. In some accounts, the mixture of all credit in a monetary 12 months, in all of the deposits taken collectively, exceeded Rs 2 lakh, and a few fastened deposit accounts have been opened for quantities exceeding Rs 1 lakh, of which some deposits have been for greater than Rs 2 lakh.
Both banks have been issued notices asking them to indicate trigger as to why penalties shouldn’t be imposed on them. After contemplating the banks’ replies, oral submissions made throughout private hearings and examination of extra submissions made by them, the RBI got here to the conclusion that the costs of non-compliance have been substantiated and warranted imposition of fines.
Source: www.financialexpress.com”