The Reserve Bank of India imposed a penalty of ₹3 crore on Axis Bank for non-compliance of Income Recognition and Asset Classification (IRAC) norms.
Besides, the central bank also imposed a penalty of ₹2 crore on Indian Overseas Bank for non-compliance with Know Your Customer (KYC) norms. These penalties were imposed on February 27.
Statutory inspection
An RBI statement said a statutory inspection of Axis Bank with reference to its financial position as on March 31, 2016 revealed, violations of various regulations issued by RBI in the assessment of non-performing assets. Based on the inspection report and other relevant documents, a notice dated November 16, 2017, was issued to the bank advising it to show cause as to why penalty should not be imposed.
In the case of IOB, the central bank said a fraud was detected in one of IOB’s branches. The examination of documents, including the bank’s internal inspection report, revealed non-compliance with KYC norms.
After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the charges of non-compliance with RBI directions and guidelines were substantiated and warranted imposition of monetary penalty.
Published - March 05, 2018 10:25 pm IST
