RBI Hits ICICI Bank and YES Bank with Hefty Penalties for Shocking Regulatory Breaches

Mumbai: The Reserve Bank of India (RBI) has imposed monetary penalties on two major banks, ICICI Bank and YES Bank, for failing to comply with regulatory guidelines. The central bank announced these penalties on May 27, highlighting significant violations by both banks.

ICICI Bank has been fined Rs 1 crore. The penalty was imposed because ICICI Bank sanctioned term loans to certain entities without conducting adequate due diligence on the viability and bankability of the projects. These loans were intended to substitute budgetary resources for certain projects. The RBI found that ICICI Bank did not ensure that the revenue streams from these projects were sufficient to cover debt servicing obligations. Furthermore, the repayment of these loans relied on budgetary resources rather than specific, monitorable projects, which is against RBI regulations.

YES Bank has been penalized Rs 91 lakh. The penalty was imposed because YES Bank levied charges for non-maintenance of minimum balance in certain savings accounts that had insufficient or zero balance. Additionally, YES Bank opened and operated internal accounts in the names of its customers for unauthorized purposes, such as parking funds and routing customer transactions. These actions are in direct violation of RBI’s regulatory guidelines.

ALSO READ: Step By Step Guide: How To File Cybercrime Complaint Online In India

The RBI emphasized that these penalties were imposed based on deficiencies in regulatory compliance and were not a reflection on the banks’ financial health or their ability to conduct their business.

Follow The420.in on

Twitter (X), LinkedIn, and YouTube