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On December 19, 2025 (Friday), the Reserve Bank of India (RBI) fined Kotak Mahindra Bank Rs 61.95 lakh for not following important banking rules. The bank violated regulations related to basic savings bank deposit (BSBD) accounts, business correspondents (BCs) & credit information companies (CICs).
The RBI announced this in a statement related to an order issued on December 11, 2025. This crackdown shows the RBI's strict policy against non-compliance with RBI BSBD accounts and related issues.
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Violations That Triggered the RBI Fine on Kotak Mahindra Bank
The penalty stems from the bank's breach of RBI directions on 'Access to Banking Services - Basic Savings Bank Deposit Account' and 'Scope of Activities for Business Correspondents (BCs).' It also violated provisions under the Credit Information Companies (CIC) Rules, 2006.
RBI's Statutory Inspection for Supervisory Evaluation (ISE 2024) dug into the bank's books as of March 31, 2024. Investigators uncovered several lapses:
- Kotak Mahindra Bank opened duplicate BSBD accounts for customers who already had one, going against RBI guidelines meant to ensure fair access to basic banking.
- The bank tied up with business correspondents to handle activities outside the permitted scope, stretching beyond what's allowed under the business correspondents' rules.
- Additionally, it sent the wrong borrower information to credit reporting companies, harming trust in credit reports.
Bank's Response and RBI's Final Call
Kotak Mahindra Bank got a chance to respond to the show-cause notice with written replies and extra documents. But after reviewing everything, RBI stood firm, the charges held up, justifying the Kotak Mahindra Bank penalty of Rs 61.95 lakh.
This is not just a light punishment; it is a reminder for all banks to closely follow RBI rules on BSBD accounts, BC operations and CIC compliance.
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