Rs 93 Lakh Penalty On Axis Bank; Rs 90 Lakh Penalty On IDBI For These Reasons

Rs 93 Lakh Penalty On Axis Bank; Rs 90 Lakh Penalty On IDBI For These Reasons
Rs 93 Lakh Penalty On Axis Bank; Rs 90 Lakh Penalty On IDBI For These Reasons

Axis Bank has been fined with Rs. 93 lakh by the RBI, for the bank has multiple violations to its name. 

Along with that, IDBI Bank has also been fined Rs. 90 lakh by the apex bank.

Axis Bank Fined Rs. 93 Lakh By RBI

The Reserve Bank of India has issued a release, which states that a monetary penalty of Rs. 93 lakh has been imposed on Axis Bank for non-compliance of certain directions issued by RBI.  

Recently, we shared that Citibank India’s consumer business was to be acquired by Axis Bank for $1.6 billion and this will be done in an all cash deal. 

The transaction between Citibank and Axis Bank includes  the sale of the consumer banking businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans, as confirmed by Citibank.

The bank stated that the the transaction also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, and personal loans portfolio.

IDBI Bank Fined Rs. 93 Lakh By RBI

As per the release, the Axis Bank has violated certain provisions on loans and advances, Know Your Customer (KYC) guidelines and ‘levy of penal charges non-maintenance of minimum balances in savings bank accounts’, it added.

Whereas, the fine imposed on IDBI Bank is for non-compliance of directions on ‘frauds – classification and reporting by commercial banks and select financial institutions’.

The release has also stated that the fine has been imposed for violating norms on strengthening the controls of payment ecosystem between sponsor banks and corporate customers like SCBs/UCBs’ and ‘cyber security framework.

As per RBI, the penalties are based on deficiencies in regulatory compliance. They are also not imposed to pronounce upon the validity of any transaction or agreement entered into by them with their respective customers.

The Competition Commission of India (CCI) is probing into the trustee units of State Bank of India, Axis Bank and IDBI Bank on suspicion of collusion on fees. The CCI stated that the Trustees Association of India – a body where the trio are founding members – last year “substantially” increased the fee for assisting companies raising debt.

They also prevented members from going below a floor price, thereby hurting competition.

The Trustees Association in turn has taken the matter to the Mumbai court, seeking to quash the antitrust investigation directive it has termed “illegal” and “capricious”.

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