India’s ICICI Bank, Kotak Mahindra Bank fined by cenbank

BENGALURU (Reuters) – The Reserve Bank of India (RBI) on Tuesday said that it has imposed a penalty of 121.9 million rupees ($1.47 million) on ICICI Bank for violating rules related to the code of conduct for the bank’s directors and for fraud reporting.

The RBI’s inspection reports showed ICICI Bank had sanctioned or committed loans to companies in which two of its directors were also directors, the RBI said in a release.

The bank had also marketed and engaged in the sale of non-financial product and failed to report frauds to the central bank within the prescribed timeline of within three weeks from detection.

The violations were detected during inspections for the financial years ending March 2020 and March 2021, the RBI said.

The central bank separately penalised fellow private lender Kotak Mahindra Bank with a sum of 39.5 million rupees.

The bank was found to have levied interest on some loans contrary to terms of sanction, failed to carry out an annual review of a service provider and ensure that its customers are not contacted between 7 pm IST and 7 am IST as directed by the RBI, inspections showed.

These violations were caught during an inspection for the financial year ending March 2022.

($1 = 83.2004 Indian rupees)

(Reporting by Hritam Mukherjee in Bengaluru; Editing by Nivedita Bhattacharjee)