The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 61.95 lakh on Kotak Mahindra Bank for non-compliance with certain regulations. The penalty was imposed on December 11, 2025, according to an RBI statement. The fine was levied for non-compliance with directions related to basic savings bank deposit (BSBD) accounts, business correspondents, and credit information companies.
The RBI conducted a Statutory Inspection for Supervisory Evaluation (ISE 2024) of Kotak Mahindra Bank, examining its financial position as on March 31, 2024. During the investigation, the RBI found that the bank had opened additional BSBD accounts for customers who already held such accounts with the bank. This is a violation of RBI regulations, which aim to provide access to banking services for all citizens.
Furthermore, the RBI discovered that Kotak Mahindra Bank had entered into an arrangement with business correspondents to undertake activities that are not covered within the scope of allowed activities. Business correspondents are agents who provide banking services on behalf of banks, particularly in rural and underserved areas. The RBI has strict guidelines governing the activities of business correspondents to ensure that they operate within the bounds of the law.
The RBI also found that Kotak Mahindra Bank had furnished inaccurate information to credit information companies (CICs) regarding certain borrowers. CICs play a crucial role in assessing the creditworthiness of borrowers, and inaccurate information can have serious consequences for both lenders and borrowers.
After considering Kotak Mahindra Bank’s response to the notice and additional submissions, the RBI concluded that the charges against the bank were sustained, warranting the imposition of a monetary penalty. The penalty of Rs 61.95 lakh is intended to deter the bank from non-compliance with RBI regulations in the future. The RBI’s actions demonstrate its commitment to ensuring that banks operate within the bounds of the law and maintain the highest standards of integrity and transparency.