RBI Imposes Rs 25 Lakh Penalty On Axis Bank For Violating Norms

RBI imposed a monetary penalty of Rs 25 lakh on Axis Bank as it failed to comply with provisions of Reserve Bank of India (Know Your Customer (KYC)) Direction, 2016.

The Reserve Bank of India (RBI) today imposed a monetary penalty of Rs 25 lakh on Axis Bank for violation of rules. The RBI, in an order dated September 1, held Axis Bank responsible for failing to comply with the provisions of  Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016. The banking regulator carried out scrutiny during February 2020 and March 2020 in a customer account maintained with the leading private bank. RBI observed that Axis Bank had failed to comply with the directions issued by it as it failed to monitor or carry out ongoing due diligence in the particular account to ensure that the transactions were consistent with its knowledge about the customer, customer's business, and risk profile. Subsequently, RBI issued a notice to Axis Bank, asking why the penalty should not be imposed on it for the contravention of the directions. After considering the reply to the notice and the verbal submissions made during the personal hearing, the RBI said it "came to the conclusion that the charge of contravention of/non-compliance with the aforesaid RBI directions was substantiated" and then imposed the monetary penalty.