RBI Slaps Rs1.29 Crore Penalty on Kotak Mahindra Bank, IDFC First Bank and PNB
Moneylife Digital Team 21 April 2025
Reserve Bank of India (RBI) has imposed a penalty of Rs1.29 crore on Kotak Mahindra Bank Ltd, IDFC First Bank Ltd and Punjab National Bank (PNB) for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs61.40 lakh has been imposed on Kotak Mahindra Bank. IDFC First Bank and PNB has been fined Rs38.60 lakh and Rs29.60 lakh, respectively.
 
Kotak Mahindra Bank has been penalised for non-compliance with directions issued by RBI on guidelines on the loan system for the delivery of bank credit and loans and advances, statutory and other restrictions.
 
After conducting the statutory inspection for supervisory evaluation (ISE 2023), RBI found that Kotak Mahindra Bank failed to ensure that the outstanding loan amount met the required percentage of the sanctioned working capital limit for certain borrowers. Additionally, the lender did not comply with the margin requirements for intra-day limits provided to certain stockbrokers.
 
IDFC First Bank was fined for non-compliance with directions issued by RBI on know-your-customer (KYC). The lender had failed to undertake the requisite customer due diligence process for opening current accounts of some sole proprietary firms. RBI's statutory inspection of PNB found that the lender had levied penal charges for non-maintenance of minimum balance in inoperative accounts. As a result, RBI has imposed a penalty of Rs29.60 lakh on PNB.
 
After considering the reply and oral submissions of Kotak Mahindra Bank, IDFC First Bank and PNB during the personal hearing, RBI concluded that "the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty," RBI says.
 
In all three cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced on the validity of any transaction or agreement they entered into with their customer.
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