RBI imposes penalty on Yes Bank and ICICI Bank
The penalty is imposed on Yes Bank because it levied charges on customers for non-maintenance minimum balance in certain savings accounts with insufficient or zero balance, which is in violation of RBI's guidelines, while ICICI Bank sanctioned term loan/ loans to certain entities in lieu of or to substitute budgetary resources envisaged for certain projects.
The Reserve Bank of India imposed penalties on two private banks—ICICI Bank and Yes Bank—for in , the regulator said in a statement Monday evening. The on is Rs 91 lakh, while that on is Rs 1 crore.Yes Bank
The penalty is imposed on because it levied charges on customers for non-maintenance minimum balance in certain savings accounts with insufficient or zero balance, which is in violation of 's guidelines. Secondly, Yes Bank opened and operated certain in the name of its customers for unauthorized purposes, like parking funds and routing customer transactions.
ICICI Bank
The penalty imposed on is because the bank sanctioned term loan/ to certain entities in lieu of or to substitute budgetary resources envisaged for certain projects. ICICI Bank sanctioned the loan without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations. The RBI inspection found that the customer serviced the loans out of budgetary resources. RBI also said that the term loans were sanctioned without ensuring the proposals were for specific monitorable projects.
Lapses found in FY22
RBI stated that ICICI Bank was imposed a penalty for non-compliance of 'Loans and Advances – Statutory and Other Restrictions' and in the case of Yes Bank penalty was due to lapses in in Banks' and 'Unauthorized Operation of internal/office Accounts'
For both banks, lapses were part of the findings of the statutory inspection for supervisory evaluation regarding their for FY22. Based on the findings, the regulator issued a notice to the bank seeking a reply as to why a penalty should not be imposed on it. After considering the findings, the RBI was of the view that the charges against the bank warranted a penalty.
Source: Stocks-Markets-Economic Times
