RBI imposes monetary penalty on Yes Bank and ICICI Bank
This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 91.00 lakh on Yes Bank Ltd for non-compliance with certain directions issued by RBI on 'Customer Service in Banks', and ‘Un-authorized Operation of internal and Office Accounts’.
The bank had levied charges for non-maintenance of minimum balance in certain savings accounts having insufficient/zero balance and opened and operated certain internal accounts in the name of its customers for unauthorized purposes like parking funds and routing customer transactions.
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Similarly, the Central Bank has imposed a monetary penalty of Rs 1.00 crore on ICICI Bank Ltd for non-compliance with certain directions issued by RBI on ‘Loans and Advances Statutory and Other Restrictions’.
The Statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to their financial position as on March 31, 2022.
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ICICI bank had sanctioned term loan(s) to certain entities in place of or to substitute budgetary resources envisaged for certain projects, without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations and the repayment of which was made out of budgetary resources without ensuring that the funding proposals were for specific monitorable projects.
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