RBI slaps penalty of Rs 3 crore on Axis Bank, 2 crore on Indian Overseas Bank

Axis Bank attracted fine for flouting NPA norms and state-run Indian Overseas Bank for KYC breach.

Mumbai: The Reserve Bank of India (RBI) on Monday said that it has imposed a penalty of Rs 3 crore on Axis Bank for violation of NPA classification norms, and Rs 2 crore on Indian Overseas Bank (IOB) for not complying with the KYC regulations, reported news agency Press Trust of India.

Country's apex bank said that it had carried out a statutory inspection of private sector player Axis Bank with reference to its financial position as on March 31, 2016.

The inspection, inter alia, revealed "violations of various regulations issued by RBI in the assessment of non-performing assets (NPA)",the central bank said in a statement.

"The RBI has imposed, on February 27, 2018, a monetary penalty of Rs 3 crore on Axis Bank Limited for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms," it said.

Regarding the state-run Indian Overseas Bank, the apex bank said in a separate release that it has imposed a monetary penalty of Rs 2 crore on IOB for a fraud detected in one of its branches due to failure to comply with Know Your Customer (KYC) norms.

"The examination of the documents, including the bank's internal inspection report, revealed, inter alia, non-compliance with the directions issued by RBI on Know Your Customer (KYC) norms", RBI said, while imposing the Rs 2 crore penalty on IOB.

The central bank said that the action on the two banks 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. 

(With PTI inputs)