The Reserve Bank of India (RBI) has imposed a hefty penalty of ₹75 lakh on ICICI Bank Limited for non-compliance with key regulatory guidelines related to property valuation and the opening of current accounts.
What Led to the Penalty?
The penalty follows supervisory findings during the Statutory Inspection for Supervisory Evaluation (ISE 2024), conducted with reference to ICICI Bank’s financial position as of March 31, 2024. RBI scrutinized the bank’s procedures and found:
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Failure to conduct property valuations through independent valuers in certain mortgage loan cases, violating RBI’s directives on ‘Valuation of Properties – Empanelment of Valuers’.
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Improper opening and maintenance of current accounts against regulatory guidelines designed to ensure discipline and prevent fund diversion and risky practices in banking operations.
RBI’s Regulatory Process
After its inspection, RBI issued a show-cause notice to ICICI Bank, allowing it to respond and explain its side. The bank provided written replies, additional submissions, and made oral representations during a personal hearing. After reviewing all evidence, the central bank determined that the bank’s actions constituted serious breaches warranting monetary punishment.
Implications for Customers and the Banking Sector
RBI has clarified that this penalty is solely on account of compliance failures and does not affect the validity of any transactions or agreements between ICICI Bank and its customers. The central bank also emphasized that this regulatory action is meant to reinforce discipline within the banking industry and does not preclude further supervisory or enforcement actions in the future.