The Reserve Bank of India imposed a monetary penalty of INR 59.20 lakh on IndusInd Bank for non-compliance with its directions on interest rates on deposits and on securitisation of standard assets, according to a press release dated 14 August. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.
The regulator said the bank had paid interest on deposits held in certain current accounts and had undertaken activities in the nature of 'synthetic securitisation'. The RBI said it found both charges sustained after considering the bank's reply to a show-cause notice, additional submissions and oral submissions made during a personal hearing.
CURRENT ACCOUNT INTEREST FLAGGED
The release did not detail the current accounts involved or how the interest was paid.
The 'synthetic securitisation' finding is a separate strand. The RBI's directions on securitisation of standard assets bar lenders from undertaking synthetic securitisation, defined as a structure in which the credit risk of an underlying pool of exposures is transferred, in whole or in part, through credit derivatives or credit guarantees.
ROOTED IN 2025 INSPECTION
The findings arose from the RBI's statutory inspection based on IndusInd Bank's financial position as of 31 March 2025.
In separate orders dated the same day, the RBI fined three non-banking financial companies: Fusion Finance (INR 2.70 lakh), Northern Arc Capital (INR 6.20 lakh) and Muthoot MCred (INR 3.10 lakh).
The RBI reiterated in its release that the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, and that the penalty is without prejudice to any other action that the RBI may initiate against the bank.
The full press release was published on the RBI's website.
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