Case Brief
What Happened
RBI, by order dated October 17, 2023, imposed a monetary penalty of ₹3.95 crore on Kotak Mahindra Bank Limited under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The penalty followed ISE 2022 supervisory findings that the bank had not complied with RBI directions on outsourcing of financial services, recovery agents, customer service, and loans and advances restrictions. RBI said the bank failed to conduct annual review/due diligence of a service provider, contacted customers outside the permitted hours, charged interest from the disbursement due date rather than the actual disbursement date, and levied foreclosure charges without a supporting loan-agreement clause. RBI concluded the non-compliance was substantiated and warranted monetary penalty.