Mumbai: The Reserve Bank of India (RBI) has imposed penalties totalling ₹2.52 crore on five banks—Axis Bank Limited, ICICI Bank Limited, Bank of Maharashtra, IDBI Bank Limited, and Bank of Baroda—for non-compliance with various regulatory directions.
The fines, announced through orders dated April 29 and 30, 2025, address violations identified during Statutory Inspections for Supervisory Evaluation conducted with reference to the banks’ financial positions as on March 31, 2023, and March 31, 2024.
ICICI Bank Limited faces the highest penalty of ₹97.80 lakh for failing to report a cybersecurity incident within the stipulated timeline, not using robust software for alerts on certain accounts, and levying late payment charges on credit card customers despite failing to send bills or statements. Axis Bank Limited was fined ₹29.60 lakh for routing unauthorised or unrelated entries through internal or office accounts. Bank of Maharashtra and IDBI Bank Limited each received penalties of ₹31.80 lakh—the former for not adhering to Know Your Customer requirements in deposit accounts opened using Aadhaar One-Time Password-based electronic Know Your Customer in non-face-to-face mode, and the latter for charging excess interest on certain Kisan Credit Card accounts. Bank of Baroda was penalised ₹61.40 lakh for paying non-cash incentives to staff engaged in insurance corporate agency services and not crediting interest to inoperative, dormant, or frozen savings deposit accounts at prescribed intervals.
The penalties were imposed under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949, following notices issued to the banks to show cause for their non-compliance. The Reserve Bank of India reviewed each bank’s written replies, additional submissions, and oral submissions during personal hearings before sustaining the charges.
Puneet Pancholy, Chief General Manager of the Reserve Bank of India, stated that the actions address deficiencies in regulatory compliance and do not pronounce on the validity of any transactions or agreements with customers. He added that the penalties are without prejudice to any further actions the Reserve Bank of India may initiate against the banks.
The Statutory Inspections for Supervisory Evaluation for ICICI Bank Limited, IDBI Bank Limited, and Bank of Baroda were based on their financial positions as of March 31, 2023, while those for Axis Bank Limited and Bank of Maharashtra referenced March 31, 2024. The Reserve Bank of India’s directions violated include those on Un-authorised Operation of Internal/Office Accounts, Cyber Security Framework in Banks, Know Your Customer, Credit Card and Debit Card Issuance and Conduct, Interest Subvention Scheme for Short Term Loans for Agriculture and Allied Activities through Kisan Credit Card, Financial Services Provided by Banks, Customer Service in Banks, and Interest Rate on Deposits.
Each bank received a notice from the Reserve Bank of India after the supervisory findings revealed non-compliance with specific regulatory guidelines. The banks were given opportunities to respond through written replies and oral submissions during personal hearings, which the Reserve Bank of India evaluated before finalising the penalties. The charges sustained against each bank were based on evidence of specific lapses, such as procedural errors in account operations, delays in cyber incident reporting, and improper handling of customer accounts.
Pancholy clarified that the monetary penalties reflect the Reserve Bank of India’s focus on ensuring adherence to regulatory frameworks. The fines aim to address operational and procedural deficiencies, and the Reserve Bank of India retains the authority to pursue additional measures if further non-compliance is detected. The banks’ customers are unaffected by the penalties, which are solely related to regulatory violations and not linked to the legitimacy of customer transactions or agreements.
The Statutory Inspections for Supervisory Evaluation are part of the Reserve Bank of India’s ongoing oversight to ensure banks comply with regulatory standards. These inspections assess financial stability and operational adherence, with findings triggering correspondence and notices when violations are detected. The inspections for 2023 and 2024 revealed specific lapses across the five banks, prompting the Reserve Bank of India to initiate the penalty process under the Banking Regulation Act, 1949.
The Banking Regulation Act, 1949, empowers the Reserve Bank of India to impose penalties for non-compliance with its directions, as outlined in Sections 47A, 46, and 51. The provisions allow the Reserve Bank of India to address deficiencies without affecting customer transactions, ensuring that regulatory enforcement targets operational issues. The penalties imposed on the five banks underscore the Reserve Bank of India’s commitment to maintaining compliance in areas critical to banking operations, including cyber security, customer verification, and account management.
– global bihari bureau
