RBI’s big action! 5 banks including Axis and ICICI fined strong – StudyToper

Nowadays the banking sector is increasing strictness. Reserve Bank of India (RBI) has recently imposed heavy fines on five big banks of the country. These include ICICI Bank, Axis Bank, Bank of Baroda, IDBI Bank and Bank of Maharashtra.

This action on these banks is due to the neglect of different rules and guidelines. RBI says that this fine has been imposed only for violation of rules, it will not affect customers’ transactions or their accounts.

This news has created a stir in the banking industry. To maintain confidence in the banking sector, the RBI periodically examines banks and if no bank does not follow the rules, it is fined.

This time five banks will have to pay a fine of about Rs 2.5 crore in total. The highest fine has been imposed on ICICI Bank. Let us know which banks have been fined and what was the reason for it.

RBI action on Axis, ICICI, Bank of Baroda, IDBI, Bank of Maharashtra

Why did RBI impose a fine? (Why RBI imposed fin?)

The main function of RBI is to make the country’s banking system safe and transparent. For this, RBI has made several rules and guidelines for banks. If a bank does not follow these rules, it is fined. This time the reasons for the fine were something like this:

• Cyber ​​Security Framework: ICICI Bank did not report an incident related to cyber security on time and also did not install an alert system for some accounts.
• KYC (Know Your Customer) Rules: Many banks did not properly follow the rules related to KYC, which increases the possibility of fraud.
• Credit/Debit Card Rules: ICICI Bank imposed late payment charge to some customers without sending bills.
• Unauthorized Internal Accounts: Axis Bank misused its internal accounts.
• Interest Subvention Scheme: IDBI Bank charged more interest on Kisan Credit Card, which is against the government scheme.
• Customer Service Issues: Bank of Baroda did not invest timely interest in Dormant Accounts and gave non-cost insensitivity to employees associated with the insurance agency.

Why the highest fine on ICICI Bank?

ICICI Bank will have to pay the highest fine of ₹ 97.80 lakh. The main reasons behind this are:

• The bank delayed reporting a cyber security incident.
• Alert system was not installed for some accounts.
• Credit card bills were not sent to many customers, but they were charged late payment.

Due to these deficiencies, RBI took strict action on ICICI Bank.

Reasons for penalty on bank of baroda

Bank of Baroda will have to pay a fine of ₹ 61.40 lakh. The main reasons for this:

• The bank did not invest timely interest in Dormant or Frozen Accounts.
• The insurance company gave non-cash incentives to the employees of the bank, which is against the RBI rules.
• Some flaws were also found in the customer service.

IDBI Bank and Action on Bank of Maharashtra

• IDBI Bank: This bank charged more interest on Kisan Credit Card, while farmers should have received less interest under the government’s Interest Subvention Scheme.
• Bank of Maharashtra: The bank opened several accounts through Aadhaar OTP based E-KYC, but did not follow the necessary rules.

Why Axis Bank got a fine?

Axis Bank has been fined ₹ 29.60 lakh. The main reason for this is:

• The bank made unauthorized transactions through its Internal/Office Accounts, which is against the RBI rules.

Is RBI fine just punishment or a chance to improve?

RBI says that these fine are only for violation of rules. Their purpose is to give banks a chance to improve, so that there are no such mistakes. It does not have any direct impact on customers’ accounts or their transactions. The RBI periodically examines banks and takes strict action if any disturbances are found.

What is learning for banks? (Learning for banks)

• All banks should strictly follow the rules of RBI.
• It is important to pay special attention to issues like KYC, Cyber ​​Security, Customer Service.
• Internal accounts should be avoided misuse.
• Interest or profit received under government schemes should be followed properly.

Important points for customers for customers

• If your bank does not follow the RBI rules, you should be cautious.
• It is important to keep KYC updates.
• Contact the bank immediately if you see any charge or bills related to credit/debit card.
• Check whether the Dormant Account is getting interest from time to time or not.

The impact of the fine on banks and customers (Impact of Fine on Banks & Customers)

• Banks have to improve their procedures.
• Banks will have to increase transparency to maintain customers’ confidence.
• RBI’s action is warned for banks that ignoring rules may be expensive.

Can there be any further action on banks?

The RBI periodically examines all banks. If a bank does not follow the rules, then he can be fined a similar penalty. Therefore, it is necessary for all banks to strengthen their processes.

Growing strictness in banking sector)

• The RBI strictly increased transparency and security in the banking sector.
• Such action is necessary to protect the interests of customers.
• Banks should continuously improve technology, cyber security and customer service.

Some important questions related to fine (FAQ)

Q1. Will customers have to pay fine?
No, this penalty is to be paid to banks, it has no direct impact on customers.

Q2. Can banking service be discontinued?
No, RBI’s fine is only for improvement, there will be no effect on banking service.

Q3. Can such fines be imposed even further?
If banks do not follow the rules, then such fines can be imposed further.

Why is it necessary to follow banking rules?

• To protect customers.
• To maintain transparency in banking systems.
• To prevent fraud and fraud.
• To make the right advantage of government schemes to customers.

Suggestions for improving banking sector

• Banks should periodically audit their system.
• Customers should be made aware that they keep their documents updated.
• Investment in technology and cyber security should be increased.
• All government schemes and RBI guidelines should be followed.

Conclusion

This action of RBI is a strict message that no negligence will be tolerated in the banking sector. ICICI Bank, Axis Bank, Bank of Baroda, IDBI Bank and Bank of Maharashtra will have to pay a fine of millions. With this, other banks should also learn how important it is to follow the rules. Customers should also be cautious and keep updating their banking documents and information from time to time.

Disclaimer:

This information is based on the official notification and media reports released by the RBI. The penalty has been imposed only on banks, it has no direct impact on customers. If there is any change in your account or banking service, contact your bank. This is not a new scheme or plan, but a regulatory action. For all banking information, always see the official website of your bank or RBI guidelines.