The Reserve Bank of India (RBI) has, by an order dated October 17, 2023, imposed a
monetary penalty of ₹3.95 crore (Rupees Three crore Ninety Five lakhs only) on Kotak
Mahindra Bank Limited
Reportpertaining to ISE 2022, and all related correspondence in that regard revealed, inter alia, non-compliance with the aforesaid directions by the bank to the extent it (i) failed to carry out annual review / due diligence of the service provider, (ii) failed to ensure that
customers are not contacted after 7 pm and before 7 am, (iii) levied interest from disbursement due date instead of the actual date of disbursement, contrary to the terms & conditions of sanction, and (iv) levied foreclosure charges despite there being no
clause in the loan agreement for levy of prepayment penalty on loans recalled/foreclosure initiated by the bank
While the penalty is paltry and no major ramifications, it does shows how the Banks rarely follow rules.
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