The penalty, issued through an order dated November 2, 2023, is a consequence of Axis Bank’s non-compliance with specific directives outlined by the RBI.
The directives in question pertain to the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016, Loans and Advances – Statutory and Other Restrictions, Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks, and Code of Conduct for Opening and Operating Current Accounts.
This regulatory action stems from the findings of the statutory inspection for supervisory evaluation (ISE 2022), conducted by the RBI with reference to Axis Bank’s financial position as of March 31, 2022.
The inspection revealed several deficiencies in regulatory compliance, including the bank’s failure to preserve records related to customer identification and addresses in specific cases.
Additionally, Axis Bank was found to have made persistent calls to certain customers, failed to ensure appropriate behaviour of recovery agents with delinquent borrowers, neglected to record the content of calls made by recovery agents, and omitted obtaining declarations from customers during the opening of current accounts.
It is essential to note that this action is centred on regulatory compliance deficiencies and does not pass judgment on the validity of specific transactions or agreements entered into by Axis Bank with its customers.
Following the issuance of a notice to Axis Bank to show cause for its non-compliance, the RBI carefully considered the bank’s response, oral submissions during the personal hearing, and additional submissions.
The conclusion drawn by the RBI was that the charges of non-compliance were substantiated, leading to the warranted imposition of the monetary penalty on Axis Bank.
Shares of Axis Bank Ltd ended at ₹1,025.60, down by ₹15.70, or 1.51%, on the BSE.
source by: CNBCTV18
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