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RBI penalizes two private sector lenders

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Photo: Mint

The RBI has imposed a penalty of 1.05 on Kotak Mahindra Bank for contravention of provisions of sub-section (2) of Section 26A of the Banking Regulation Act, read with paragraph 3 of The Depositor Education and Awareness Fund Scheme

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MUMBAI : The Reserve Bank of India (RBI) on Monday said it has penalized private sector lenders Kotak Mahindra Bank and Indusind Bank for failing to comply with regulatory guidelines.

The banking regulator has imposed a penalty of 1.05 on Kotak Mahindra Bank for contravention of provisions of sub-section (2) of Section 26A of the Banking Regulation Act, read with paragraph 3 of The Depositor Education and Awareness Fund Scheme.

“The examination of the risk assessment reports, inspection reports and all related correspondence pertaining to the same, revealed, inter alia, contravention of...provisions of the Act and the directions issued by RBI," it said. RBI fined Indusind Bank, 1 crore and said that a statutory inspection for supervisory evaluation was conducted with reference to its financial position as on 31 March, 2020. An examination of the risk assessment report, inspection report revealed non-compliance with the directions issued by RBI.

It said the bank failed to adhere to the customer due diligence procedure in accounts opened using OTP based e-KYC as in some accounts the aggregate of credits in a fiscal year in deposits taken together surpassed 2 lakh threshold.

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