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RBI Imposed Penalty of Rs 5 crore on Axis Bank

Published on July 30, 2021
Current Context:  The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 5 crore on Axis Bank.
RBI Imposed Penalty of Rs 5 crore on Axis Bank
  • The Axis Bank has not followed certain provisions pertaining to the corporate customer, cybersecurity, and financial inclusion.
  • The penalty was imposed for not following norms set by RBI under ‘Strengthening the Controls of Payment Ecosystem between Sponsor Banks and SCBs/UCBs as a Corporate Customer’, ‘Cyber Security Framework in Banks’, ‘RBI (Financial Services provided by Banks) Directions, 2016’, ‘Financial Inclusion- Access to Banking Services – Basic Savings bank Deposit Account’ and ‘Frauds – Classification and Reporting’.
  • The RBI imposed the penalty on the basis of scrutiny conducted by it in the backdrop of fraud and related transactions which was submitted by the Axis bank to the RBI in June 2020. The RBI thus observed contraventions to the norms during the inspection process and hence the penalty was imposed
  • The central bank conducted statutory Inspections for Supervisory Evaluation (ISE) of Axis Bank with reference to its financial position as of 31st March 2017, 31st March 2018, and 31st March 2019
  • The penalty was imposed in the exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act).
  • Static Part: 
    • HQ of RBI and Axis Bank: Mumbai
    • Governor of RBI: Shaktikanta Das
    • MD and CEO of Axis Bank: Amitabh Chaudhry

Question: 

Ques: 1: What amount of penalty was imposed by RBI on Axis Bank in July 2021, when it was observed that Axis Bank didn’t follow certain provisions pertaining to corporate customer, cyber security, and financial inclusion?
a. Rs 50 lakh
b. Rs 1 crore
c. Rs 5 crore
d. Rs 10 lakh
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