RBI imposes monetary penalty on IDFC First Bank Limited

Case Brief

RBI, by order dated April 3, 2025, imposed a monetary penalty of Rs 38.60 lakh on IDFC First Bank Limited under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The penalty followed a scrutiny and show-cause process in which RBI found that the bank had failed to comply with RBI directions on Know Your Customer (KYC), specifically by not undertaking the requisite Customer Due Diligence process for opening current accounts of certain sole proprietary firms. RBI noted that the penalty is based on regulatory deficiencies and does not pronounce on the validity of any underlying transaction or agreement.