RBI imposes fine on Manappuram Finance, IndusInd Bank over non-compliance

The Reserve Bank of India (RBI) on Friday imposed penalties on IndusInd Bank and Manappuram Finance amounting to Rs 27.3 lakh and Rs 20 lakh, respectively, for non-compliance with norms.

 

The statutory inspection of the companies was conducted by the RBI with reference to their financial position as of March 31, 2023.

 

The penalty on Manappuram Finance was imposed for failing to undertake customer PAN verification at the time of customer acceptance and for allotting multiple identification codes to some customers instead of a Unique Customer Identification Code (UCIC) for each customer.

 

The RBI stated that the penalty on IndusInd Bank “pertained to the opening of certain savings deposit accounts in the name of ineligible entities. This warranted the imposition of a monetary penalty. The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreements entered into by the bank with its customers.”

 

Based on supervisory findings of non-compliance with RBI directions and related correspondence, a notice was issued to the companies, advising them to show cause as to why penalties should not be imposed for their failure to comply with the said directions.

 

After considering the companies’ replies to the notice, additional submissions made by them, and oral submissions during the personal hearing, the RBI found that the charge relating to the opening of certain savings deposit accounts in the name of ineligible entities was sustained, warranting the imposition of monetary penalties.