Case Brief
What Happened
RBI, by order dated May 21, 2024, imposed a monetary penalty of ₹1.00 crore on ICICI Bank Ltd. for non-compliance with RBI directions on ‘Loans and Advances – Statutory and Other Restrictions’. Following supervisory findings from the bank’s ISE 2022 inspection and a show-cause process, RBI sustained charges that the bank sanctioned term loans to certain entities in substitution of budgetary resources, without adequate due diligence on project viability and bankability, without ensuring sufficient revenue streams for debt servicing, with repayment out of budgetary resources, and without ensuring the funding was for specific monitorable projects. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.