The Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on ICICI Bank, and Rs 91 lakh on Yes Bank for non-compliance with norms.
“The Reserve Bank of India (RBI) has, by an order dated May 21, 2024, imposed a monetary penalty of ₹1.00 crore (Rupees One Crore only) on ICICI Bank Ltd. (the bank) for non-compliance with certain directions issued by RBI on ‘Loans and Advances – Statutory and Other Restrictions’. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949,” the RBI said in a statement dated May 27.
It said ICICI Bank had sanctioned term loan(s) to certain entities (i) in lieu of or to substitute budgetary resources envisaged for certain projects; (ii) without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations; (iii) the repayment/servicing of which was made out of budgetary resources; and (iv) without ensuring that the funding proposals were for specific monitorable projects.
The RBI separately conducted a Statutory Inspection for Supervisory Evaluation (ISE 2022) of ICICI Bank and Yes Bank with reference to their financial position as on March 31, 2022.
On Yes Bank, the RBI imposed a Rs 91 lakh fine “for non-compliance with certain directions issued by RBI on ‘Customer Service in Banks’, and ‘Un-authorised Operation of lnternal/Office Accounts'”.
Following an examination, the RBI found that Yes Bank had “(i) levied charges for non-maintenance of minimum balance in certain savings accounts having insufficient/zero balance and (ii) opened and operated certain internal accounts in the name of its customers for unauthorized purposes like parking funds and routing customer transactions”, according to a separate statement.
The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank, it said.
Apart from these, the RBI on May 27 also imposed penalties on Bharati Sahakari Bank Ltd; The Greater Bombay Co-operative Bank Limited, Mumbai; and The Gandhinagar Urban Co-operative Bank Ltd., Gandhinagar, Gujarat.
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