RBI slaps penalty on Axis Bank and Indian Overseas Bank for violating norms
 Source : NewsBharati  Date : 06-Mar-2018

New Delhi, March 6: The Reserve Bank of India (RBI) imposed a penalty of Rs 3 crore on Axis Bank and and Rs 2 crore on Indian Overseas Bank for non-compliance with the directions issued on Income Recognition and Asset Classification norms.

RBI clarified that the action was taken on the account of deficiencies in regulatory compliance. The penalty was imposed on February 27 in cognizance of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.

Apex bank said it had carried out a statutory inspection of private sector player Axis Bank with reference to its financial position as on March 31, 2016.

The inspection, inter alia, revealed "violations of various regulations issued by RBI in the assessment of non-performing assets (NPA)",the central bank said in a statement.

Regarding the state-owned Indian Overseas Bank, the regulator said in a separate release that a "fraud was detected" in one of the branches of the bank.

"The examination of the documents, including the bank’s internal inspection report, revealed, inter alia, non-compliance with the directions issued by RBI on Know Your Customer (KYC) norms", RBI said, while imposing the Rs 2 crore penalty on IOB.

RBI said the action on the two banks is based on deficiencies in regulatory compliance and "is not intended' to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.