RBI slaps record £1.2 mn fine on ICICI Bank over lapses

Wednesday 25th October 2023 06:01 EDT

The RBI is threatening to punish ICICI Bank a record amount of over £1.22 million for violating lending laws and failing to report fraud. The amount charged against ICICI Bank exceeds the fine of £1 million that was imposed against HDFC Bank in May 2021 due to irregularities in auto loans. Furthermore, the amount is greater than the £1.21 million in fines levied against private banks in FY23.
In 2020 and 2021, RBI examined ICICI Bank's books to assess the bank's financial standing. In breach of RBI regulations, the bank had provided loans to businesses where two of its directors held board positions, the RBI discovered during the inspection. In addition, the bank advertised and offered non-financial goods, which are not under the purview of a commercial bank.
Third, ICICI Bank failed to report frauds to the RBI in time. Following the detection of these irregularities, RBI served the bank a show-cause notice.
“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the provisions of the Banking Regulation Act and RBI directions was substantiated and warranted imposition of monetary penalty on the bank,” the central bank said.

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