RBI Imposes ₹61.95 Lakh Penalty on Kotak Mahindra Bank for Regulatory Lapses

The Reserve Bank of India (RBI) on Friday imposed a monetary penalty of ₹61.95 lakh on Kotak Mahindra Bank for non-compliance with regulatory norms related to basic savings bank deposit (BSBD) accounts, business correspondents, and credit information companies. 

The penalty was imposed through an order dated December 11, 2025, the central bank said in an official statement.

Inspection and Regulatory Findings

The penalty followed the RBI’s Statutory Inspection for Supervisory Evaluation (ISE 2024), which assessed the bank’s financial position and regulatory compliance as of March 31, 2024. During the inspection process, the RBI identified multiple lapses that were found to be in violation of existing regulatory guidelines.

Violations Related to BSBD Accounts

According to the RBI, Kotak Mahindra Bank failed to adhere to directions issued under ‘Access to Banking Services – Basic Savings Bank Deposit Account’. The inspection revealed that the bank opened additional BSBD accounts for certain customers who already held such accounts with the bank, which is not permitted under RBI norms.

Issues With Business Correspondents

The RBI also found that the bank had entered into arrangements with business correspondents to undertake activities that were outside the permitted scope defined by the central bank. 

Such deviations from prescribed guidelines raise concerns around customer protection and operational oversight.

Incorrect Reporting to Credit Information Companies

In addition to the above, Kotak Mahindra Bank was found to have furnished inaccurate information related to certain borrowers to credit information companies. This amounted to a contravention of the provisions of the Credit Information Companies Rules, 2006, which govern accurate and timely reporting of credit data.

RBI’s Decision and Clarification

After issuing a show-cause notice, the RBI examined the bank’s written responses and additional submissions. Upon evaluation, the central bank concluded that the charges were sustained, warranting the imposition of the monetary penalty. 

The RBI clarified that the penalty is based on deficiencies in regulatory compliance and does not question the validity of any transaction or agreement entered into by the bank with its customers.

Kotak Mahindra Bank Share Price

On December 22, 2025, Kotak Mahindra Bank share price (NSE: KOTAKBANK) opened at ₹2,170.00, touching the day’s low at ₹2,160.10, as of 12:20 PM on the NSE.

Also Read: Adani Group to Restructure Debt, Refinancing Existing Bank Loans with Longer-Tenure Funding!

Conclusion

The penalty underscores the RBI’s continued focus on enforcing compliance and strengthening governance standards in the banking sector. It also serves as a reminder to banks to maintain strict adherence to regulatory guidelines, especially in areas impacting financial inclusion, customer data integrity, and third-party engagements.

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