Axis Bank's negligence cost heavily, RBI imposed huge fine

Axis Bank of the private sector has been costed heavily by its negligence. Because of this, the Reserve Bank of India (RBI) has imposed a huge fine. Along with this, fine has also been imposed on gold loan companies Manappuram Finance and Anand Rathi Global Finance. See this news...

Private sector Axis Bank has suffered losses due to a little carelessness. The Reserve Bank of India (RBI) has imposed a fine of about Rs 91 lakh on him. Along with this, fine has also been imposed on gold loan giving company Manappuram Finance and Anand Rathi Global Finance Company of finance sector. Both the companies also have to pay a huge amount in fine. Why is this fine imposed?

The Reserve Bank of India has said in a statement that Axis Bank did not properly follow many provisions of KY Guidelines-2016. Apart from this, other rules related to outsourcing of banking services, loan related risk management, opening and operating current accounts have also not been followed. Because of this the bank has to pay a fine of Rs 90.92 lakh.

The Central Bank has imposed this penalty on Axis Bank using its regulatory powers. In this regard, RBI had also issued an order on 2 November 2023, but the bank has not been able to follow it either. The Central Bank has made it clear in its statement that this action has been taken against the bank due to lack of compliance with regulatory rules. Its purpose is not to pass any judgment regarding the validity of any transaction or agreement entered into by the Bank with its customers.

Manappuram and Anand Rathi Finance also fined

The central bank informed in a separate statement that a fine of Rs 42.78 lakh has been imposed on Thrissur-based Manappuram Finance. This penalty has been imposed for not properly following the 'Systematic Import Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Guidelines-2016' related to non-banking finance companies.

If we understand this rule properly, then RBI has made some rules for Non-Banking Finance Companies (NBFCs). Now some NBFCs can take deposits from general customers, while some are not allowed to do so. The Reserve Bank has imposed a fine on Manappuram Finance for ignoring the rules related to this.

Similarly, a fine of Rs 20 lakh has also been imposed on Anand Rathi Global Finance Limited for not following KYC (Know Your Customer) rules.