RBI Imposes Fines on India Post Payments Bank and Equitas Small Finance Bank for Regulatory Violations, Ensuring Compliance Across Financial Institutions

RBI Takes Action Against Banks

The Reserve Bank of India (RBI) is responsible for overseeing banking and non-banking financial institutions in India. Recently, the RBI has imposed fines on India Post Payments Bank and Equitas Small Finance Bank for violating regulations.

Fines Imposed

India Post Payments Bank (IPPB) has been fined ₹26.70 lakh, while Equitas Small Finance Bank faces a hefty fine of ₹65 lakh. Additionally, Apptus Finance India Private Limited has received a fine of ₹3.10 lakh for its non-compliance.

Reasons for the Fines

Apptus Finance India Private Limited changed its management without obtaining prior approval from the RBI, leading to a shift in 30% of its directors. This change raised flags regarding their adherence to regulations, prompting the RBI to issue a show cause notice followed by an investigation that resulted in the fine.

As for India Post Payments Bank, it was found to have upgraded some savings accounts without the customers’ consent, which also included imposing an annual fee after this upgrade. Once these allegations were confirmed, the RBI decided to take action.

Equitas Small Finance Bank was penalized for imposing a criminal fee on certain floating rate term loans that were not intended for business purposes. They also secured collateral for loans up to ₹1.6 lakh inappropriately.

Conclusion

The RBI’s actions are aimed at ensuring compliance with established rules and regulations. Importantly, these measures will not impact the transactions or agreements between the banks and their customers.