The Reserve Bank of India has imposed a monetary penalty of ₹27.30 lakh on IndusInd Bank Limited for non-compliance with its 'Interest Rate on Deposits' directions, the regulator announced on 20 December 2024. The penalty follows a Statutory Inspection for Supervisory Evaluation of IndusInd Bank with reference to its financial position as on 31 March 2023, which found that the bank had opened certain savings deposit accounts in the name of entities not eligible to hold them.
IndusInd Bank is a private sector commercial bank whose business includes consumer finance, vehicle loans, microfinance through its Bharat Financial Inclusion subsidiary, and corporate and institutional banking. The bank's total assets exceed ₹5 trillion.
SAVINGS ACCOUNT ELIGIBILITY RULES AT ISSUE
The RBI's 'Interest Rate on Deposits' directions set out requirements for how licensed banks must compute and credit interest across different categories of deposit accounts, including savings deposits, fixed deposits of varying tenors, and recurring deposit products. The directions also specify which customers and entities may open savings deposit accounts; the RBI found that IndusInd had opened such accounts for ineligible entities.
Following the inspection, the RBI issued a notice to IndusInd Bank setting out the alleged contraventions and inviting the bank to respond. After considering IndusInd Bank's reply, additional submissions and oral submissions at a personal hearing, the RBI found that the charge relating to the opening of savings deposit accounts in the name of ineligible entities was sustained, warranting a monetary penalty. The regulator said 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.