On 3rd September 2024, the Reserve Bank of India imposed hefty fines on two leading private-sector banks—HDFC Bank and Axis Bank—for failing to adhere to specific regulatory directives.
Penalties Overview
- HDFC Bank: ₹1 crore
- Axis Bank: ₹1.91 crore
Axis Bank Violations
Axis Bank was penalized for:
- Allowing ineligible entities to open savings accounts.
- Failing to provide Unique Customer Identification Codes (UCIC).
- Incorrectly securing collateral for agricultural loans.
- One of its subsidiaries acted as a technology service provider, violating regulations.
These violations were found during a statutory inspection based on the bank’s financial position as of March 31, 2023, leading to the ₹1.91 crore penalty.
HDFC Bank Violations
HDFC Bank’s fine was imposed due to:
- Non-compliance with interest rate guidelines on deposits.
- Misuse of recovery agents.
- Offering gifts beyond permissible limits.
- Opening accounts for ineligible entities.
- Violating guidelines on customer service, particularly by contacting customers outside permitted hours.
The RBI uncovered these violations during an inspection of the bank’s financial position.