Recorded RBI impact
Fine: Rs 2.00 Cr
Monetary penalty · Fresh imposition
Published by RBI
24 Oct 2017
Case Brief
The Reserve Bank of India imposed a monetary penalty on IDFC Bank Limited on October 23, 2017. RBI said the bank had contravened regulatory restrictions and failed to adhere to certain directions relating to the sanction and renewal of loans and advances, based on a status report for the bank’s financial position as on December 31, 2016. After issuing a show-cause notice, considering the bank’s reply, and hearing oral submissions, RBI concluded that the non-compliance was substantiated and imposed the penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty on IDFC Bank Limited under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The bank was found to have failed to adhere to certain RBI directions, with the status report for its financial position as on December 31, 2016 revealing non-adherence to directions pertaining to sanction and renewal of loans and advances. After a show-cause notice dated August 07, 2017 and consideration of the bank’s reply and oral submissions, RBI concluded that the non-compliance was substantiated and warranted a penalty.
Operating Impact
IDFC Bank Limited must absorb the monetary penalty of ₹20 million. The action does not itself impose a new operational restriction, but it reflects RBI’s finding of non-compliance with lending-related directions and may affect supervisory scrutiny going forward.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 Cr
- Order Date
- 23 Oct 2017
- Effective From
- 23 Oct 2017
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank