March 6: Axis Bank has been slapped with a penalty of Rs 3 crore by the Reserve Bank of India for violating non-performing asset classification guidelines. Apart from Axis Bank, the apex bank has also penalised the Indian Overseas Bank (IOB) for non-compliance with KYC regulations. IOB will have to pay up Rs 2 crore as penalty in this regard.
The slapping of penalty on Axis Bank has come after the RBI carried out a statutory inspection the bank with reference to its financial position as on March 31, 2016. According to a report quoting an central bank statement, the inspection had revealed “violations of various regulations issued by RBI in the assessment of non-performing assets (NPA)”. The statement further said that on February 27 this year the Reserve Bank has imposed a penalty of Rs 3 crore on Axis Bank “for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms”.
In the case of Indian Overseas Bank, the Reserve Bank has been quoted as saying that a “fraud was detected” in one of the branches of IOB. Further examination of the papers that included IOB’s internal inspection report has brought to light non-compliance with the directions issued by RBI on KYC norms. This called for imposition of Rs 2 crore penalty on the bank.
According to reports, the RBI has taken the punitive action on the two banks based on deficiencies in regulatory compliance.