RBI fines Axis Bank and two finance firms for regulatory violations

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RBI fines Axis Bank and two finance firms for regulatory violations
Credit: © Reuters.

MUMBAI - The Reserve Bank of India (RBI) has imposed monetary penalties on Axis Bank (NS: AXBK ) Ltd, Manappuram Finance (NS: MNFL ) Ltd, and Anand Rathi Global Finance Ltd for non-compliance with various regulatory directives. The central bank's actions highlight a continuing effort to enforce strict adherence to financial regulations among banking and non-banking financial companies in India.

Axis Bank faced a significant penalty of ₹90.92 lakh ($111,000 approximately) for a multitude of infractions identified during the 'Statutory Inspection for Supervisory Evaluation (ISE 2022)'. The RBI's inspection revealed lapses in maintaining customer identification records and deficiencies in the management of recovery agents, including their conduct and the recording of calls. The bank also failed to obtain necessary declarations at account opening, violating the 'Know Your Customer (KYC) Directions, 2016', among other regulatory guidelines.

In a similar vein, Manappuram Finance Ltd was fined ₹42.78 lakh ($52,000 approximately) due to non-compliance with 'Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016'. The company neglected to return surplus amounts realized from gold auctions pledged by borrowers between April 1, 2021, and September 30, 2022.

Additionally, Anand Rathi Global Finance Ltd incurred a penalty of ₹20 lakh ($24,400 approximately) for not adhering to KYC Directions. After issuing show cause notices and evaluating additional submissions made by these institutions, the RBI substantiated the charges leading to the imposition of fines.

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