The Reserve Bank of India, on May 21, imposed a penalty of ₹1 crore on ICICI Bank for non-compliance with certain directions on ‘Loans and Advances – Statutory and Other Restrictions’.

The statutory inspection of the bank for FY22 revealed that the bank had sanctioned term loans to certain entities in lieu of or to substitute budgetary resources envisaged for certain projects, and without undertaking due diligence on the viability and bankability of the projects to ensure that revenue streams from the projects were sufficient to take care of the debt servicing obligations. Further, the repayment/servicing was made out of budgetary resources without ensuring that the funding proposals were for specific monitorable projects, the central bank said.

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The regulator also fined Yes Bank ₹91 lakh, on May 17, for violation of certain norms on ‘Customer Service in Banks’, and ‘Un-authorised Operation of lnternal/Office Accounts’.

The bank inspection for FY22 showed that the private sector lender had levied charges for non-maintenance of minimum balance in certain savings accounts having insufficient/zero balance and had opened and operated certain internal accounts in the name of its customers for unauthorised purposes like parking funds and routing customer transactions.