RBI imposes fines on Axis Bank, Manappuram Finance, Anand Rathi Global Finance

The Reserve Bank of India has slapped a monetary penalty of ₹90.92 lakh on private lender Axis Bank and ₹42.78 lakh on gold loan firm Manappuram Finance for violation of certain regulatory norms.The central bank has also imposed a monetary penalty of ₹20 lakh on Anand Rathi Global Finance for non-compliance with certain provisions of the RBI (Know Your Customer (KYC)) Directions, 2016.

In a notification issued on Thursday, RBI said that the fine has been imposed on Axis Bank “for non-compliance with certain directions issued by RBI on ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’, ‘Loans and Advances – Statutory and Other Restrictions’, ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’ and ‘Code of Conduct for Opening and Operating Current Accounts’”.

“This action is based on the 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,” it said in a release.

Meanwhile, the monetary fine on Manappuram Finance was slapped for non-compliance with certain provisions of the “Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016”.

“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers,” the RBI said.

On the other hand, the action on Anand Rathi Global Finance is based on the “deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers”.

Last month, the RBI slapped monetary penalty of ₹12.19 crore on ICICI Bank for sanctioning loans to companies in which two of its directors were also directors and failing to report frauds to the regulator within the prescribed timelines. The action was taken after the central bank conducted the statutory inspections for supervisory evaluation of ICICI Bank with reference to its financial position as of March 31, 2020, and March 31, 2021.

Besides, the central bank also imposed ₹5.39 crore fine on Vijay Shekhar Sharma-led Paytm Payments Bank Limited (PPBL) for non-compliance with some of its provisions. PPBL, a subsidiary of Paytm parent One97 Communications, violated the provisions of the 'RBI (KYC) Directions, 2016’, ‘RBI Guidelines for Licensing of Payments Banks’, ‘cyber security framework in banks’, and ‘securing mobile banking applications including UPI ecosystem’. 

Among others, Union Bank of India, RBL Bank, and Bajaj Finance were also panalised for not following regulatory norms.