RBI imposes monetary penalty on Kotak Mahindra Bank

The bank received a penalty for non-compliance with certain directions issued by RBI on Customer Protection–Limiting Liability of Customers in Unauthorised Electronic Banking Transactions, the central bank said.

“The Reserve Bank of India (RBI) imposed a monetary penalty of ₹1,05,00,000/- (Rupees one crore and five lakh only) on Kotak Mahindra Bank Limited (the bank) for contravention of the provisions of sub-section (2) of Section 26A of the Banking Regulation Act, 1949 read with paragraph 3 of The Depositor Education and Awareness Fund Scheme, 2014’ and for non-compliance with the directions on ‘Customer Protection Limiting Liability of Customers in Unauthorised Electronic Banking Transactions, and Loans and Advances Statutory and Other Restrictions,” the RBI said in a statement.

As per RBI’s press release, this action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

The Statutory Inspection for Supervisory Evaluation (ISE) of the Kotak Mahindra Bank was conducted by the RBI with regard to its financial positions as on March 31, 2018, and March 31, 2019, the RBI said.