RBI imposes monetary penalty on ICICI (12.19 Cr) & Kotak Mahindra Bank (3.95 Cr)

Reserve Bank of India has imposed a monetary penalty of 12.19 Crore rupees on ICICI Bank and 3.95 Crore rupees on Kotak Mahindra Bank due to violations of various provisions of the Banking Regulation Act and directions of RBI. 

In a statement issued yesterday, RBI has said, ICICI bank sanctioned or committed loans to companies in which two of its directors were also directors. The statement says, ICICI Bank also marketed and engaged in the sale of non-financial products, and failed to report fraud to RBI within the prescribed timelines.
 
In the case of Kotak Mahindra Bank, RBI’s statement says, the bank failed to ensure that customers were not contacted after 7 p.m. and before 7 a.m. Kotak Mahindra Bank also levied interest from the disbursement due date instead of the actual date of disbursement, contrary to the terms and conditions of the sanction.

The bank also levied foreclosure charges despite there being no clause in the loan agreement for a levy of a prepayment penalty on loans recalled/foreclosure initiated by the bank.