RBI imposes penalty on Axis Bank, Manappuram Finance for violating norms

The Reserve Bank of India (RBI) on Thursday levied monetary penalties on Axis Bank and Manappuram Finance, citing non-compliance with certain regulations of the central bank.

Axis Bank was fined Rs 90.92 lakh as the RBI found from its Inspection for Supervisory Evaluation (ISE) for its financial position as of March 31, 2022, that the lender failed to comply with Know Your Customer (KYC) regulations.

The private bank had failed to preserve records pertaining to the identification of customers and their addresses in certain cases, made persistent calls to some of the customers, failed to ensure appropriate behaviour of recovery agents with some of the delinquent borrowers, and failed to ensure a tape recording of the content/text of the calls made by the recovery agents to some of the customers, and did not obtain declarations from the customers at the time of opening current accounts.

The central bank imposed a monetary penalty of Rs 42.78 lakh on Manappuram Finance on account of failing to adhere to certain regulations. The decision comes on the back of an inspection conducted by the RBI based on the Non-Banking Financial Company (NBFC)’s financial position as of March 31, 2022. The company was found not to have transferred surplus amounts to the borrowers from the auction of gold articles pledged by the borrowers during April 01, 2021, to September 30, 2022.