The Reserve Bank of India (RBI) took action against two major private sector banks on Monday, citing rule violations.
YES Bank and ICICI Bank were found to be violating several guidelines set by the central bank. As a result, RBI imposed fines of Rs 91 lakh on YES Bank and Rs 1 crore on ICICI Bank.
YES Bank’s Customer Service and Account Violations
RBI reported that YES Bank failed to adhere to rules related to customer service and the management of internal and office accounts.
The central bank discovered numerous instances where YES Bank charged fees from accounts for insufficient balances.
Additionally, illegal activities were conducted using internal and office accounts. In 2022, YES Bank repeatedly opened
and operated internal accounts under customer names for unlawful purposes such as fund parking and routing transactions.
ICICI Bank’s Loan and Advance Irregularities
Similarly, ICICI Bank was found guilty of neglecting guidelines related to loans and advances. As a result, RBI fined the bank Rs 1 crore. The bank sanctioned many loans without thorough investigations, exposing itself to financial risks.
The RBI investigation highlighted significant shortcomings in ICICI Bank’s loan approval process, including the approval of loans without detailed feasibility analyses of projects and borrowers’ repayment capabilities.
Share Performance of YES Bank and ICICI Bank
On Monday, YES Bank shares rose by Rs 0.010, or 0.043 percent, closing at Rs 23.04 on the BSE. In contrast, ICICI Bank shares fell by Rs 2.10, or 0.19 percent, closing at Rs 1,129.15.
