RBI imposes monetary penalty on Axis Bank Limited

The Reserve Bank of India (RBI) has, imposed a monetary penalty of Rs 1.91 crore (Rupees One crore and ninety-one lakh only) on Axis Bank Limited (the bank) for contravention of provisions of Section 19 (1)(a) of the Banking Regulation Act, 1949 (BR Act), and non-compliance with certain directions issued by RBI on ‘Interest Rate on Deposits’, ‘Know Your Customer (KYC)’ and ‘Credit Flow to Agriculture- Collateral free agricultural loans’. 

This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) of BR Act.

The Statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank was 
conducted by RBI with reference to its financial position as on March 31, 2023 and a review of activities of its subsidiary company was carried out by RBI. 
 

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The following charges against the bank were sustained, warranting imposition of 
monetary penalty:
a. The bank opened certain savings deposit accounts in the name of ineligible
entities;
b. The bank had allotted multiple customer identification code to certain 
customers instead of a Unique Customer identification Code (UCIC) for each customer;
c. The bank had obtained collateral security for agricultural loans upto Rs 1.60 lakh in certain cases; and

d. A wholly owned subsidiary of the bank undertook business as a technology service provider, which is not permissible business that can be undertaken by a banking company under Section 6 of the BR Act.
 

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