RBI Imposes Penalties on Axis Bank, J&K Bank, and Bank of Maharashtra: The Reserve Bank of India (RBI) has levied a monetary penalty of Rs 2.5 crore on Jammu & Kashmir Bank for failing to comply with certain RBI directives. The penalty stems from the bank’s inability to follow the RBI’s instructions on the central repository of substantial common exposures across banks, loans, and advances, as well as statutory and other constraints. Additionally, the bank did not ensure the timely implementation and strengthening of SWIFT-related operational controls. The RBI’s statutory inspection conducted on March 31, 2021, revealed non-compliance with these directions.
Axis Bank Fined for Violating RBI Guidelines on Credit Card Accounts
Axis Bank has been levied a monetary penalty of Rs 30 lakh by the RBI for non-compliance with certain provisions of the RBI’s directions on Prudential Norms on Income Recognition, Asset Classification, and Provisioning pertaining to Advances – Credit Card Accounts. The penalty derives from the bank imposing late payment penalties on select accounts for credit card dues that were paid on time through third-party platforms.
Bank of Maharashtra Penalized for Breaching RBI’s Directives on Loans and ATMs
The RBI has imposed a monetary penalty of Rs 1.45 crore on Bank of Maharashtra for non-compliance with specific directions issued by the RBI. The penalty is for the bank’s failure to follow the RBI’s Loans and Advances – Statutory and Other Restrictions rules, as well as the Advisory on Man in the Middle (MiTM) Attacks in ATMs.
During the RBI’s inspection, it was discovered that the bank had sanctioned a term loan to a corporation without conducting proper due diligence on the viability and bankability of the projects for which the loan was provided. Furthermore, the bank failed to deploy the requisite ATM control measures on schedule, notably the end-to-end encryption of communication between the ATM terminal/PC and the ATM Switch.