RBI imposes monetary penalty on Yes Bank and ICICI Bank

Yes Bank

NEW DELHI: The Reserve Bank of India (RBI) has imposed monetary penalty on Yes Bank and ICICI Bank for non-compliances with certain directions issued by it.

The penalties imposed on them are Rs 91 lakh and Rs 1 crore, respectively, RBI said in its orders.

RBI said Yes Bank did not comply with ‘Customer Service in Banks’, and ‘Un-authorized Operation of lnternal/Office Accounts’.

Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found that the charges against the bank were sustained, warranting imposition of monetary penalty.

The bank, it asserted, levied charges for non-maintenance of minimum balance in certain savings accounts having insufficient/zero balance; opened and operated certain internal accounts in the name of its customers for unauthorized purposes like parking funds and routing customer transactions.

Separately, RBI said ICICI Bank did not comply with certain directions issued by RBI on ‘Loans and Advances – Statutory and Other Restrictions’.

RBI found that ICICI Bank had sanctioned term loan(s) to certain entities in lieu 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; the repayment/servicing of which was made out of budgetary resources; and without ensuring that the funding proposals were for specific monitorable projects. (ANI)

Also Read: Know About the Revised YES Bank FD Interest Rates

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