Published on November 17, 2023, 4:07 am

Rbi Imposes Penalties On Axis Bank And Manappuram Finance For Regulatory Violations

The Reserve Bank of India (RBI) has taken strict action against two financial entities, Axis Bank and Manappuram Finance, for their failure to comply with regulatory directives. As a result, these companies have been slapped with monetary penalties of Rs 90.92 lakh and Rs 42.78 lakh respectively. These penalties have been imposed due to various violations that were observed by the RBI.

Axis Bank, being a prominent private sector bank in the country, had to pay a hefty fine for multiple infractions. The violations included failures in maintaining proper customer identification records, deficiencies in managing recovery agents, and the absence of necessary declarations during account opening. These shortcomings came to light during the ‘Statutory Inspection for Supervisory Evaluation (ISE 2022)’.

Manappuram Finance Ltd, on the other hand, incurred penalties for non-compliance with specific directions issued by the RBI. As a non-banking financial company specializing in gold loans, it neglected to return surplus amounts obtained from gold auctions pledged by borrowers.

By imposing these penalties on Axis Bank and Manappuram Finance, the RBI reaffirms its strong commitment to upholding financial regulations for both banking and non-banking financial companies operating in India. It aims to ensure proper customer identification, effective risk management practices, and adherence to high standards of conduct in financial outsourcing activities.

The regulatory oversight exercised by the RBI is designed to maintain the integrity of financial transactions and operations within India’s financial system. It emphasizes the importance of complying with regulations and sustains stability in this sector.

The actions taken against Axis Bank and Manappuram Finance underscore the seriousness with which the RBI addresses violations of its directives. Financial institutions must take note as they serve as a reminder of their obligation to adhere strictly to regulatory guidelines and maintain robust governance systems. By imposing these penalties, the RBI demonstrates its commitment toward building trust among consumers and reinforcing compliance as an essential aspect of the financial sector.

Source: RBI Fines Axis Bank and Manappuram Finance for Regulatory Violations

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