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 action was part of a batch that also included penalties on three non-banking financial companies, reflecting the regulator's continuing focus on operational compliance across the wider financial system.
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'. Both practices, in the RBI's assessment, fell foul of the specific directions covering deposit pricing and asset transfers, and both formed the basis for the monetary penalty.
CURRENT ACCOUNT INTEREST FLAGGED
Under RBI rules, banks are generally prohibited from paying interest on balances held in current accounts, which are meant to serve as transactional rather than savings vehicles. Any deviation from that principle, even through indirect arrangements, is treated by the regulator as a breach of the interest-rate directions applicable to deposits and can prompt supervisory action.
IndusInd, one of India's largest private-sector lenders, was found to have paid interest on such balances in specific instances flagged during supervisory review. The precise product structures were not detailed in the summary release, but the classification under the deposit-rate directions is the substantive finding for enforcement purposes and drives the calibration of the fine.
The 'synthetic securitisation' finding is a separate strand. RBI directions on the securitisation of standard assets carefully distinguish between traditional true-sale structures, which are permitted subject to conditions, and synthetic structures, which are more restricted. The regulator concluded that IndusInd's activities crossed into the latter category, triggering the enforcement response.
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. Such inspections are the principal supervisory instrument used by the regulator to test compliance with a wide range of prudential and conduct directions, with penalties typically following at some remove from the underlying review.
The INR 59.20 lakh fine is meaningful within the scale of RBI operational penalties, which are typically calibrated in the low tens of lakhs of rupees. In the same batch of enforcement actions, three unnamed non-banking financial companies also received penalties, reflecting the regulator's practice of grouping related orders when they arise from broadly similar findings.
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, its standard formulation for such orders and a reminder that the finding is about process rather than customer harm.
For IndusInd Bank, the direct financial impact is limited, but the specific findings – interest paid on current accounts and synthetic securitisation activity – add detail to the public record of the bank's regulatory relationship. The full press release was published on the RBI's website for market participants and analysts to review.