The Reserve Bank of India (RBI) on 10 September imposed monetary penalty on two major private banks—Axis Bank and HDFC Bank—citing various rule violations.
In the case of HDFC Bank, the RBI imposed a penalty of Rs one crore after the RBI found that the bank gave gifts in the form of paying first-year premium for the complimentary life insurance cover costing more than Rs 250 to the depositors at the time of accepting certain deposits.
Also, the bank opened certain savings deposit accounts in the name of ineligible entities, the RBI said. Further, the bank failed to ensure that customers are not contacted after 7 pm and before 7 am, the RBI said.
The action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI said.
Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank, the RBI said.
In the case of Axis Bank, the RBI imposed a penalty of Rs 1.91 crores after finding that the bank opened certain savings deposit accounts in the name of ineligible entities.
Also, the bank had allotted multiple customer identification code to certain customers instead of a Unique Customer ldentification Code (UCIC) for each customer, the RBI said.
Further, the bank had obtained collateral security for agricultural loans upto Rs 1.60 lakh in certain cases and a wholly owned subsidiary of the bank undertook business of technology service provider, which is not permissible business that can be undertaken by a banking company under Section 6 of the BR Act, the RBI added.