NEW DELHI: The Reserve Bank of India (RBI) has imposed monetary penalties on Yes Bank and ICICI Bank for non-compliance with certain directives. Yes Bank has been fined Rs 91 lakh, while ICICI Bank has been penalized Rs 1 crore.
Yes Bank failed to adhere to the guidelines on ‘Customer Service in Banks’ and ‘Un-authorized Operation of lnternal/Office Accounts’, as per the central bank. It was issued a show-cause notice based on supervisory findings and related correspondence, asking why a penalty should not be imposed for its non-compliance.
RBI concluded that the charges against the bank were substantiated, necessitating the imposition of a monetary penalty after considering the bank’s reply, oral submissions during the personal hearing, and additional submissions.
RBI stated that Yes Bank charged customers for not maintaining minimum balance in certain savings accounts with insufficient or zero balance. The bank also opened and operated certain internal accounts in the name of its customers for unauthorized purposes, such as parking funds and routing customer transactions.
Additonally, in a separate case, RBI found that ICICI Bank did not comply with certain directions issued by the central bank on ‘Loans and Advances – Statutory and Other Restrictions’. The bank sanctioned term loans to certain entities in lieu of or to substitute budgetary resources envisaged for certain projects without conducting proper due diligence on the viability and bankability of the projects.
ICICI Bank failed to ensure that the revenue streams from the projects were sufficient to cover the debt servicing obligations, and the repayment or servicing of the loans was made out of budgetary resources. Additionally, the bank did not ensure that the funding proposals were for specific monitorable projects.
