RBI imposes Monetary Penalty of INR3,00,00,000 on Axis Bank Limited

          Reserve Bank of India vide Press Release on Mar5, 2018 has informed to the public at large that it has imposed, on February 27, 2018, a monetary penalty of ₹ 30 million on Axis Bank Limited (the bank)

The monetary penalty is for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms.

The penalty was necessary as Axis Bank did not adhere to the Income Recognition and Asset Classification (IRAC) norms.

RBI has clarified that  this action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Brief Background : -

The statutory inspection of the bank by Reserve Bank of India with reference to its financial position as on March 31, 2016 revealed, inter alia, violations of various regulations issued by RBI in the assessment of Non-Performing Assets (NPAs).

Based on the inspection report and other relevant documents, a Notice, dated November 16, 2017, was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI.

After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions/ guidelines were substantiated and warranted imposition of monetary penalty.

          Axis Bank has  3,589 domestic branches (including extension counters) and 13,977 ATMs across the country.

         

Additional Reading:-

Axis Bank reports NPA divergences of Rs 5633 cr, reveals exposure to 20 insolvency a/cs

Light at the end of the NPA tunnel for Axis Bank

Clarification sought from AXIS Bank Ltd

Axis Bank To Focus Only On Better-Rated Borrowers

Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances