RBI slaps fine of Rs 1 crore on ICICI Bank, Rs 91 lakhs on Yes Bank for non-compliance

The Reserve Bank of India has slapped ICICI Bank with a penalty of Rs1 crore for failing to comply with specific directives related to 'Loans and Advances – Statutory and Other Restrictions'.

The central bank's inspection of ICICI Bank for the financial year 2022 revealed that the bank had granted term loans to certain entities as replacements for budgetary resources allocated for certain projects.

However, ICICI Bank did not conduct proper due diligence on the feasibility and sustainability of these projects to ensure that the revenue generated would be enough to cover the debt servicing obligations.

Additionally, the repayment of these loans was made using budgetary resources without confirming that the funding was specifically allocated for monitorable projects.

In a similar move, the RBI had also fined Yes Bank ₹91 lakh on May 17 for breaching regulations concerning 'Customer Service in Banks' and 'Un-Authorised Operation of Internal/Office Accounts'.

The inspection of Yes Bank for the fiscal year 2022 uncovered that the private sector lender had imposed fines for accounts with insufficient or zero balance and had opened and utilised internal accounts in the name of customers for unauthorised purposes such as parking funds and processing customer transactions.