Kotak Mahindra Bank Fined for Rule Violations

The Reserve Bank of India has fined Kotak Mahindra Bank Rs 61.95 lakh for not complying with norms related to basic savings accounts, business correspondents, and credit information company rules. The penalty follows a supervisory evaluation revealing multiple non-compliance issues, including duplicate accounts and inaccurate credit reporting.

The Reserve Bank of India (RBI) on Friday levied a significant monetary penalty of Rs 61.95 lakh on Kotak Mahindra Bank. This action was taken due to the bank's failure to adhere to regulations concerning basic savings bank deposit accounts, business correspondents, and credit information companies.

RBI outlined the reasons for the fine, citing non-compliance with specific directions issued under 'Access to Banking Services - Basic Savings Bank Deposit Account' and 'Scope of activities to be undertaken by Business Correspondents (BCs)'. Additionally, there was a breach of the Credit Information Companies Rules, 2006 (CIC Rules).

The penalty follows an RBI inspection for supervisory evaluation in 2024, revealing multiple discrepancies. These included the opening of additional BSBD accounts for customers, unauthorized activities with business correspondents, and the provision of inaccurate data to credit information companies. Despite the bank's responses and submissions, the RBI determined the violations warranted the penalty.

(With inputs from agencies.)