RBI imposes monetary penalty on ICICI Bank Ltd

Case Brief

By order dated October 17, 2023, RBI imposed a monetary penalty of ₹12.19 crore on ICICI Bank Ltd. The penalty was levied for contravention of Section 20(1) of the Banking Regulation Act, 1949, RBI directions on loans and advances, Sections 6(2) and 8 of the BR Act read with RBI directions on financial services provided by banks, and RBI directions on fraud classification and reporting. RBI said its inspections (ISE 2020 and ISE 2021) revealed that the bank sanctioned/committed loans to companies in which two of its directors were also directors, marketed and sold a non-financial product, and failed to report frauds within the prescribed timelines. RBI clarified that the penalty was based on regulatory compliance deficiencies and did not pronounce on the validity of any transaction or agreement entered into by the bank with its customers.