The Reserve Bank of India (RBI) issued penalties on IndusInd Bank and Manappuram Finance on Friday totaling Rs 27.3 lakh and Rs 20 lakh, respectively, for noncompliance with regulations.

The RBI performed a statutory inspection of the enterprises based on their financial positions as of March 31, 2023.

Manappuram Finance was penalized for failing to verify customer PANs at the time of customer acceptance and for assigning numerous identification codes to some customers rather than a Unique Customer Identification Code (UCIC) for each customer.

The RBI noted that the penalty against IndusInd Bank "related to the opening of certain savings deposit accounts in the names of ineligible entities." This justified the imposition of a monetary penalty. The action is based on shortcomings in regulatory compliance and is not intended to rule on the legitimacy of any transactions or agreements entered into by the bank with its clients."

Based on supervisory findings of noncompliance with RBI instructions and accompanying correspondence, a notice was issued to the firms, instructing them to show cause why penalties should not be imposed for failing to comply with the aforementioned directions.

After considering the companies' responses to the notice, additional submissions made by them, and oral submissions made during the personal hearing, the RBI determined that the charge relating to the opening of certain savings deposit accounts in the names of ineligible entities was sustained, resulting in the imposition of monetary penalties.