The Reserve Bank of India (RBI) has imposed monetary penalties totaling ₹2.206 crore on five major Indian banks for lapses in regulatory compliance. The penalties, announced on May 3, 2025, target ICICI Bank, Axis Bank, IDBI Bank, Bank of Maharashtra, and Bank of Baroda.(Reserve Bank of India)
Breakdown of Penalties and Violations
Axis Bank – ₹29.60 lakh
Axis Bank was penalized for routing unauthorized or unrelated entries through certain internal or office accounts, indicating deficiencies in internal control mechanisms.
ICICI Bank – ₹97.80 lakh
ICICI Bank faced the highest penalty among the five. The bank failed to report a cybersecurity incident to the RBI within the stipulated timeframe. Additionally, it did not implement robust software for sending alerts on selected accounts, failed to dispatch bills or statements to several customers, and charged late payment fees on credit cards without proper communication.
Bank of Maharashtra – ₹31.80 lakh
The bank was fined for opening certain deposit accounts using Aadhaar-based OTP verification without conducting in-person customer verification, violating KYC norms.
IDBI Bank – ₹31.80 lakh
IDBI Bank was penalized for charging interest rates higher than permitted on some Kisan Credit Card (KCC) accounts, reflecting non-compliance with prescribed interest rate guidelines.
Bank of Baroda – ₹61.40 lakh
The bank was fined for two primary reasons: failing to prevent an insurance company from offering non-cash rewards to its staff for selling insurance products, and not regularly crediting interest to certain inactive or frozen savings accounts as mandated.
RBI's Stance on Compliance
The RBI emphasized that these penalties are imposed solely for regulatory non-compliance and do not affect the validity of any transactions or agreements between the banks and their customers. The central bank reiterated its commitment to enforcing strict adherence to regulatory norms to maintain the integrity and stability of the financial system.
These actions underscore the RBI's proactive approach in monitoring and ensuring compliance within the banking sector, serving as a reminder to financial institutions about the importance of robust internal controls and adherence to regulatory guidelines.
The RBI clarified that these fines are for not following rules properly, and they do not affect any agreements or transactions between the banks and their customers.
