RBI Penalty on Bank: A recent case shows how the arbitrary behaviour of banks takes a toll on the common man. The Reserve Bank imposed a hefty fine on two private sector banks because these banks were flouting the rules and charging arbitrary fees from the common man and were also distributing loans to companies in violation of the rules.
The importance of the Reserve Bank for the common man can be understood from a recent case. Seeing the common man being harmed by the arbitrariness of 2 private sector banks, RBI took action and imposed a fine of about 2 crore rupees. A penalty of 1 crore has been imposed on one bank and 91 lakh rupees on the other. You will also be surprised to know the arbitrariness of both the banks. On one hand, these banks were charging arbitrary fees from the common man citing the rules and on the other hand, they were distributing loans to companies by breaking the rules.
According to the release issued by the Reserve Bank, RBI has imposed a fine of Rs 1 crore on ICICI, a big private sector bank. At the same time, a penalty of Rs 91 lakh has been imposed on Yes Bank. Both the banks had violated the notification and regulation issued by RBI on March 31, 2022.
What mistake did ICICI Bank commit?
In its audit, the Reserve Bank found that ICICI Bank did not follow the rules while giving loans. The bank gave loans to some institutions or companies without proper investigation. The projects of these companies were not eligible to get sufficient loan, yet the bank gave the money. This put the loan at risk and the Reserve Bank imposed a fine of Rs 1 crore for breaking the rules.
Yes Bank has played a game.
Yes Bank, which was on the verge of bankruptcy a few days ago, saved itself from the interference of the government and RBI, then it started charging arbitrary fees from the common man. RBI found in its audit that Yes Bank charged arbitrary fees from customers in the name of not having minimum balance. This fee was charged in the name of parking fund and customer transaction. RBI considered it against the rules and imposed a fine of Rs 91 lakh on the bank.
What does RBI’s rule say?
The Reserve Bank has clearly stated in the matter of loans that unless the applicant is fully eligible and does not provide any collateral for the risky loan, the loan should not be approved. Similarly, RBI has made clear rules regarding minimum balance and apart from this, banks cannot charge arbitrary fees from customers for any service.
