The Reserve Bank of India (RBI) has taken a strict stance against Kotak Mahindra Bank for violation of banking rules. Issuing an official order on Friday, the central bank has imposed a monetary penalty of ₹61.95 lakh on the bank. The central bank’s investigation found that Kotak Mahindra Bank had not followed several important banking guidelines. In this, the bank opened a second ‘Basic Savings Bank Deposit’ account for those customers who already had such accounts (which is against the rules).
Financial transactions outside the official scope
The investigation also revealed that the bank carried out financial transactions with its business correspondents which were outside their official scope. Also the bank shared wrong data/information related to some customers to credit information companies. This action has been taken under the order dated December 11, 2025. The Reserve Bank came to this conclusion after a statutory inspection of the financial position of the bank till March 31, 2024.
The Central Bank made it clear
The Central Bank said in a release that this penalty has been imposed on the bank in exercise of the powers given to RBI under the provisions of Section 46(4)(i) of Section 47A(1)(c) of the BR Act and Section 23(4) of Section 25(1)(iii) of the Credit Information Companies (Regulation) Act, 2005. The central bank has clarified that the penalty is based only on deficiencies in regulatory compliance. It is not intended to call into question the validity of any transaction or agreement entered into by the Bank with its customers.
Earlier on Thursday, the Reserve Bank had imposed several restrictions on The Valsad Mahila Nagarik Sahakari Bank, which includes a ban on withdrawal of money by customers due to the deteriorating financial condition of the bank. These restrictions, in the form of ‘directives’, will remain in force for six months from the close of business on Thursday.
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