RBI slaps penalty on 2 private sector banks; here's where lenders went wrong

RBI Fine: The Reserve Bank of India (RBI) has imposed a penalty on Axis Bank and HDFC Bank for deficiencies in statutory and regulatory compliance. India's central bank has imposed a total fine of Rs 2.91 crore on these two private sector banks.

Why was Axis Bank fined?

RBI said in a statement that Axis Bank has been penalized Rs 1.91 crore for violating certain provisions of the Banking Regulation Act. The infractions include non-compliance with directives on 'Interest Rate on Deposits,' 'Know Your Customer (KYC)' procedures, and 'Collateral-Free Agricultural Loans.'

Why was HDFC Bank Fined?

Another statement said that HDFC Bank has been fined Rs 1 crore for failing to adhere to regulations regarding 'Interest Rates on Deposits,' 'Recovery Agents of Banks,' and 'Customer Service in Banks.'

Impact on Customers

The RBI clarified that these fines are related to regulatory and compliance issues and will not impact the validity of any transactions or agreements between the banks and their customers.