Reserve Bank of India imposed monetary penalty on July 4 1.05 crore on Kotak Mahindra Bank for non-compliance related to customer protection, loans and advances, and other norms.
“The Reserve Bank of India (RBI), by an order dated June 29, 2022, has imposed a monetary penalty of 1,05,00,000/- on Kotak Mahindra Bank Limited (Bank) for contravention of the provisions of sub-section (2) of section 26A of the Banking Regulation Act, 1949 (Act). RBI statement said,
The apex bank also mentioned that ‘the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers’.
Read also: Cryptocurrencies are a clear threat: RBI Governor Shaktikanta Das
Earlier, RBI had conducted statutory inspection for Supervisory Appraisal (ISE) of Kotak Mahindra Bank with reference to its financial position as on March 31, 2018 and March 31, 2019.
Scrutiny of the Risk Assessment Report, Inspection Report and all correspondence relating thereto revealed non-compliance of the above provisions of the Act and the directions issued by RBI.
The report stated that Kotak Mahindra Bank failed to credit the eligible amount to the Depositor Education and Awareness Fund within the stipulated period or the amount involved in unauthorized electronic transactions within 10 working days from the date of notification by the customer to the customer’s account. Stayed. And, stockbrokers also failed to enforce margin on advances.
Later a show-cause notice was also sent to the private lender, but after considering the bank’s reply to the notice, the RBI decided to impose a penalty on him.