Axis Bank Limited has been fined by the RBI for contravention of/non-compliance with certain provisions of directions issued by it.
New Delhi: The Reserve Bank of India (RBI) on Wednesday imposed a fine of Rs 25 lakhs on Axis Bank Limited for contravention / non-compliance with certain provisions of the instructions issued by it.
“RBI imposes a fine of Rs 25 Lakhs on Axis Bank Limited (the bank) for violation / non-compliance with certain provisions of the instructions issued by RBI contained in the Reserve Bank of India – (Know Your Customer (KYC)) Directorate, 2016, “RBI said in a statement.
The central bank said that a careful examination was carried out in February and March 2020 on a customer account managed by Axis Bank, and it was observed that the bank had “not complied” with the instructions contained in the Reserve Bank of India KYC Direction, 2016.
“… the bank did not monitor/perform due diligence on said account to ensure transactions were consistent with its knowledge of the client, business, and risk profile,” the statement added.
RBI also reportedly sent a notice to Axis Bank, asking it to justify why the penalty should not be imposed on it for breaching the instructions.
After reviewing the response to the notice and the oral submissions made during the personal hearing, the RBI stated that it “came to the conclusion that the charge of contravention/failure to comply with RBI instructions above was justified “and justified the imposition of a financial penalty.
The RBI added, however, that the sanction is based on breaches of regulatory compliance and is not intended to rule on the validity of any transaction or agreement entered into by the bank with its customers.
