**Executive Summary**
The Reserve Bank of India (RBI) imposed a monetary penalty of ₹61.95 lakh on Kotak Mahindra Bank Limited due to non-compliance with RBI directions on banking services and contravention of Credit Information Companies Rules. The penalty was imposed following a Statutory Inspection for Supervisory Evaluation (ISE 2024) conducted with reference to the bank’s financial position as of March 31, 2024. The order was dated December 11, 2025, and this press release is dated December 19, 2025.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹61.95 lakh on Kotak Mahindra Bank Limited.
* The penalty is for non-compliance with RBI directions on 'Access to Banking Services - Basic Savings Bank Deposit Account' and 'Scope of activities to be undertaken of Business Correspondents (BCs)' and contravention of provisions of Credit Information Companies Rules, 2006.
* The penalty was imposed under the powers conferred on RBI by specific sections of the Banking Regulation Act and the Credit Information Companies (Regulation) Act, 2005.
* **Supervisory Findings:**
* The Statutory Inspection for Supervisory Evaluation (ISE 2024) was conducted with reference to the bank's financial position as on March 31, 2024.
* Supervisory findings revealed non-compliance, leading to a notice to the bank to show cause why a penalty should not be imposed.
* **Charges Sustained:**
* The bank opened another BSBD account of certain customers who were already holding BSBD account in the bank.
* The bank entered into an arrangement with BCs for undertaking activities, which are not covered within the scope of activities that can be undertaken by BCs.
* The bank furnished inaccurate information, in respect of certain borrowers, to Credit Information Companies (CICs).
**Impact Analysis**
**Kotak Mahindra Bank Limited**
* **Impact**
* Faces a monetary penalty of ₹61.95 lakh.
* Needs to address the deficiencies in compliance identified by the RBI.
* **Action Required**
* Ensure compliance with RBI directions on 'Access to Banking Services' and 'Scope of activities to be undertaken of Business Correspondents (BCs)'.
* Ensure compliance with Credit Information Companies Rules, 2006 (CIC Rules).
* Refrain from opening additional BSBD accounts for existing customers.
* Ensure arrangements with BCs are within the permissible scope of activities.
* Provide accurate information to Credit Information Companies (CICs).
**Customers of Kotak Mahindra Bank**
* **Impact**
* The action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
* **Action Required**
* No specific action is required from customers based on this press release.
**Business Correspondents of Kotak Mahindra Bank**
* **Impact**
* Possible changes to contracts or arrangements with Kotak Mahindra Bank.
* **Action Required**
* Review arrangements with Kotak Mahindra Bank to ensure compliance with RBI regulations.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
Kotak Mahindra Bank Limited: The bank on which the monetary penalty was imposed.
Banking Regulation Act (BR Act): The act under which RBI exercised its powers; specifically sections 47A(1)(c) and 46(4)(i).
Credit Information Companies (Regulation) Act, 2005: The act under which RBI exercised its powers; specifically section 25(1)(iii) read with section 23(4).
Credit Information Companies Rules, 2006 (CIC Rules): Rules contravened by Kotak Mahindra Bank Limited.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
December 19, 2025
RBI imposes monetary penalty on Kotak Mahindra Bank Limited
The Reserve Bank of India (RBI) has, by an order dated December 11, 2025,
imposed a monetary penalty of ₹61.95 lakh (Rupees Sixty One Lakh Ninety Five
Thousand only) on Kotak Mahindra Bank Limited (the bank) for non-compliance with
certain directions issued by RBI on ‘Access to Banking Services - Basic Savings
Bank Deposit Account’ and ‘Scope of activities to be undertaken of Business
Correspondents (BCs)’ and contravention of provisions of Credit lnformation
Companies Rules, 2006 (ClC Rules). This penalty has been imposed in exercise of
powers conferred on RBI under the provisions of section 47A(1)(c) read with section
46(4)(i) of the BR Act and section 25(1)(iii) read with section 23(4) of the Credit
Information Companies (Regulation) Act, 2005.
The Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank was
conducted by RBI with reference to its financial position as on March 31, 2024.
Based on supervisory findings of non-compliance with the provisions of RBI
directions, CIC rules and related correspondence in that regard, a notice was issued
to the bank advising it to show cause as to why penalty should not be imposed on it
for its failure to comply with the said provisions of RBI directions and CIC rules.
After considering the bank’s reply to the notice and additional submissions made
by it, RBI found, inter alia, that the following charges against the bank were
sustained, warranting imposition of monetary penalty:
i. The bank opened another BSBD account of certain customers who were already
holding BSBD account in the bank;
ii. The bank entered into an arrangement with BCs for undertaking activities, which
are not covered within the scope of activities that can be undertaken by BCs; and
iii. The bank furnished inaccurate information, in respect of certain borrowers, to
Credit Information Companies (CICs).
This action is based on deficiencies in statutory and regulatory compliance and is
not intended to pronounce upon the validity of any transaction or agreement entered
into by the bank with its customers. Further, imposition of monetary penalty is without
prejudice to any other action that may be initiated by RBI against the bank.
(Brij Raj)
Press Release: 2025-2026/1742 Chief General Manager