On May 27, the Reserve Bank of India (RBI) announced a monetary penalty on ICICI Bank and YES Bank due to rule violations.
ICICI Bank was fined Rs 1 crore for sanctioning term loans to certain entities to replace budgetary resources for specific projects without proper due diligence. The bank failed to ensure that the projects were viable and capable of generating sufficient revenue to service the debt. Additionally, the loans were repaid from budgetary resources without confirming that the funds were allocated to specific, monitorable projects.
YES Bank faced a monetary penalty of Rs 91 lakh for levying charges on savings accounts with insufficient or zero balances and for opening and operating internal accounts in the name of customers for unauthorized activities, such as parking funds and routing customer transactions.
The RBI highlighted these violations in a press release, emphasizing the importance of adherence to regulatory guidelines.