RBI Imposes Penalties On Yes Bank And IDFC Bank
RBI penalises Yes Bank and IDFC Bank.
Reserve Bank of India today imposed a Rs 6 crore penalty on Yes Bank and a Rs 2 crore penalty on IDFC Bank for violating various norms set by the regulator.
Yes Bank was penalised as it failed to adequately follow norms on recognition of non-performing assets while reporting March 2016 financials. Besides, the Rana Kapoor-led lender delayed reporting an incident where the security of its automated teller machine (ATM) network was compromised.
As part of the asset quality review initiated by the central bank in October 2015, banks were asked to recognise some loans as NPAs and adequately provide for them before March 2016, since they were defaulters according to the regulator’s assessment. The additional bad loans burden hit earnings of most banks.
Yes Bank became the centre of attention in October 2016 because of a security incident involving the its ATM network. The bank blamed the security breach on a third party service provider which was maintaining its ATMs. According to the RBI, the bank did not report this incident within the mandated time.
Watch: Rana Kapoor on why it took Yes Bank several days to report the security breach.
RBI penalised IDFC Bank for not adhering to norms around sanctioning and renewing loans and advances. The regulator found this while assessing the bank’s financial position as on December 31, 2016.
Based on its findings, the central bank had sought responses from both banks in separate notices. After receiving IDFC Bank’s response in the matter, RBI decided to impose the penalty.
