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Dvara Kshetriya Gramin Financial Services Pvt Ltd (Dvara KGFS), a leading NBFC operating in the remote rural parts of India, on Wednesday announced the appointment of LVLN Murty as the CEO, effective September 1, 2021.
He will take over from CO Joby.
Murthy joined Dvara KGFS as Chief Business Officer in 2016 and got promoted as Deputy CEO in the year 2019, says a press release.
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The allegations are similar to a case Apple faces in the European Union, where regulators last year started an investigation into Apple’s imposition of an in-app fee of 30% for distribution of paid digital content and other restrictions.
The Indian case was filed by a little-known, non-profit group which argues Apple’s fee of up to 30% hurts competition by raising costs for app developers and customers, while also acting as a barrier to market entry.
“The existence of the 30% commission means that some app developers will never make it to the market … This could also result in consumer harm,” said the filing, which has been seen by Reuters.
Unlike Indian court cases, filings and details of cases reviewed by the Competition Commission of India (CCI) are not made public. Apple and the CCI did not respond to a request for comment.
In the coming weeks, the CCI will review the case and could order its investigations arm to conduct a wider probe, or dismiss it altogether if it finds no merit in it, said a source familiar with the matter.
“There are high chances that an investigation can be ordered, also because the EU has been probing this,” said the person, who declined to be identified as the case details are not public.
The complainant, non-profit “Together We Fight Society” which is based in India’s western state of Rajasthan, told Reuters in a statement it filed the case in the interest of protecting Indian consumers and startups.
In India, though Apple’s iOS powered just about 2% of 520 million smartphones by end-2020 – with the rest using Android – Counterpoint Research says the U.S. firm’s smartphone base in the country has more than doubled in the last five years.
The Apple case in India comes just as South Korea’s parliament this week approved a bill that bans major app store operators like Alphabet Inc’s Google and Apple from forcing software developers to use their payment systems.
“MIDDLEMAN IN TRANSACTIONS”
Companies like Apple and Google say their fee covers the security and marketing benefits their app stores provide, but many companies disagree.
Last year, after Indian startups publicly voiced concern over a similar in-app payments fee charged by Google, the CCI ordered an investigation into it as part of a broader antitrust probe into the company. That investigation is ongoing.
The India antitrust case against Apple also alleges that its restrictions on how developers communicate with users to offer payment solutions are anti-competitive, and also hurt the country’s payment processors who offer services at lower charges in the range of 1-5%.
Apple has hurt competitors by restricting developers from informing users of alternative purchasing possibilities, thereby harming “app developers’ relationship with their customers by inserting itself as middleman in every in-app transaction,” the filing added.
In recent weeks, Apple has loosened some of the restrictions for developers globally, like allowing them to use communications – such as email – to share information about payment alternatives outside of their iOS app.
And on Wednesday, it said it would allow some apps to provide customers an in-app link to bypass Apple’s purchase system, though the U.S. firm retained a ban on allowing other forms of payment options inside apps.
Gautam Shahi, a competition law partner at Indian law firm Dua Associates, said that even if companies change their behaviour after an antitrust case in filed, the CCI still looks at past conduct.
“The CCI will look at recent years to see if the law was violated and if consumers and competition were harmed,” said Shahi.
The CCI has plans to speed up all cases involving big technology firms such as Amazon and Google by deploying additional officers and working to more stringent internal deadlines.
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Most of the bank credit is driven by the retail and agri segments as sanctioned limits of corporates remain unutilised to the extent of 25%.
The credit to large industries shrank 2.9% in July.
The credit growth in the last two months is being led by is led by MSMEs, agriculture and retail as corporate lending stays tepid.
Lending to MSMEs, agriculture and retail picked up sharply in July this year over previous year’s levels, data on sectoral deployment of bank credit released by the Reserve Bank of India showed.
Credit to agriculture and allied activities expanded 12.4% in July 2021 as compared with 5.4% in last July.
Deleveraging on
Corporates that are flush with cash on account of booking bumper profits are looking to deleverage their bank loans and prepaying them.
HDFC Bank received Rs 30,000 crore in prepayments through the Jue quarter, mainly from companies in the commodities and infrastructure sectors.
In the April-June quarter, AAA or AA-rated companies sought to deleverage as they recorded solid cash balances. Cash flows were robust at commodity companies because of record iron ore or aluminium prices, boosting net profits. Infrastructure companies, too, reported fatter bottom lines due to the government’s extensive highway-building programme.
With demand collapsing during pandemic and uncertainty rising, companies had put a pause on expansion and have focused on becoming debt-free.
PSU loan books shrink
The deleveraging has led to a drop in corporate loan demand for banks, especially PSU ones.
The domestic corporate loans by the State Bank of India fell 2.23 per cent to Rs 7,90,494 crore in the quarter ended June 30, 2021, compared to Rs 8,09,322 crore in the same quarter last year. In the first quarter of FY21, SBI reported 3.41 per cent growth in corporate advances.
Union Bank of India‘s share of industry exposure in domestic advances dropped to 38.12 per cent at Rs 2,40,237 crore from 39.4 per cent at Rs 2,47,986 crore in the same quarter a year ago. Corporate loans dropped 3% at Indian Bank during the last quarter. At PNB, corporate loans fell 0.57 per cent at Rs 3,264,66 crore in June quarter 2021 compared to Rs 3,28,350 crore a year ago.
Up to May, the gross loans to large industries declined by 1.7 per cent year-onyear, according to RBI data.
However, HDFC Bank expanded its corporate loans by over 10% in the April-June quarter to about Rs 3.15 lakh crore.
Shift to bonds
The corporate world focused on deleveraging high-cost loans through fundraising via bond issuances despite interest rates at an all-time low. This has led to muted credit growth for banks.
Corporates raised Rs 2.1 lakh crore in the December quarter and Rs 3.1 lakh crore in the fourth quarter from the corporate bond markets. In contrast, the corresponding year-ago figures were Rs 1.5 lakh crore and Rs 1.9 lakh crore, respectively.
Bonds were mostly raised by top-rated companies at 150-200 basis points below bank loans. Most of the debt was raised by government companies as they have top-rated status.
For AAA-rated corporate bonds, the yield was 6.85 per cent in May 2020, which fell to 5.38 per cent in April 2021 and to 5.16 per cent in May 2021.
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This is 63 per cent of the total consumer base in Mumbai and a paperless, e-payment system is good for the environment, he said.
“We provide a discount of Rs 120 annually (Rs 10 a month) to consumers across island city if they opted for e-bill. The response has been overwhelming and more than 31,000 opted for the scheme,” Chandra said.
He further said that soon, BEST consumers can walk into any SBI branch and pay the bill by cash or cheque.
“We are also encouraging digital payment in a big way. There is a discount of 0.25 per cent of the total bill max Rs 500 for making an online payment. This includes miBEST app, payment on www.bestundertaking.net, Net Banking, credit card, debit card, Paytm, BHIM, Google pay and Amazon pay etc,” he said.
Besides, there are special incentive schemes for consumers who pay digitally regularly and at the same time, opt for e-bills for at least a year.
Such consumers will be rewarded by way of drawing lottery, and winners will get attractive rewards, he said, adding that the list of winners will be announced this month.
“The initiative is not only environment friendly, but also ensures timely and reliably receipts of bills to consumers,” he said.
Nearly 40 per cent of consumers with a majority in slum areas will be a big challenge as they may take time to switch from paper bills to digital, but BEST wants to persuade them too.
The BEST spends Rs 7.66 per paper bill every month, and so giving a Rs 10 discount per bill every month means incurring losses of Rs 2.44 per bill. This comes to Rs 3 crore losses annually for all consumers.
“We are willing to bear the losses for a paperless system as it helps save our trees,” he added.
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The big question that’s bothering everyone is how are the gains from crypto assets to be calculated? By assuming that cryptocurrencies bought first will be sold first (first in first out/FIFO) or by assuming that the ones bought last were sold first (last in first out/LIFO)?
Take a hypothetical example, if an investor bought one bitcoin in 2017 for $1,000, another in 2018 for $ 13,000. In 2020, of his two bitcoins, he sold one for $7,000.
For taxation purposes, the question is to know which cryptocurrency did he sell — the one purchased in 2017 or the one purchased in 2018.
The difference is that if the “FIFO” method is applied, then the tax will be on the gains of $6,000. And there will be no taxes if LIFO is applied, tax experts said.
“For the purpose of taxation, the FIFO method should be used to account for taxation. But as of today, there is no clarity around this mainly because even the asset class is not defined,” said Amit Maheshwari, tax partner at tax consulting firm AKM Global.
Tax is always levied on gains. That is, sale price minus cost — but due to the nature of cryptocurrencies, ascertaining the cost and the gains have become tricky, tax experts said.
The main problem for taxation is that there is no clarity on what cryptocurrencies are. That is, whether they are currency, asset, commodity or something else. Till that is articulated, investors and traders will be able to get around taxation. The other problem is that tax rates may also differ for someone who is an investor and someone who trades for a living.
“There is no clarity on how to calculate the gains from cryptocurrency and whether it should be traded on a par with capital assets or in case of a trader it should be treated as a stock in trade. Valuation of crypto is also a challenge, particularly on crypto to crypto trades,” said Meyyappan Nagappan, leader, Digital Tax, Nishith Desai Associates.
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Dominance of a few players may not be in the best interest and there is a need to raise competition, Asbe said in the exclusive interaction.
Edited excerpts:
The Unified Payments Interface has recorded over 3 billion transactions a month in July and August for the first time. This is a doubling of growth in a year. What is driving this?
Our focus has been on enabling specific use cases. With the support of SEBI, we are nearing 50% of total retail IPO applications using UPI. It is helping expand investments, especially among the younger generations. Similarly, the AutoPay (recurring mandates) solution is gaining traction, and Netflix, Hotstar are in the initial stages of going live. e-RUPI has just been launched. We now have customers of more than 200 banks using the UPI platform, and we intend to roll this out to clients of 500 banks.
There have been discussions about payment failures. How effective has NPCI been in bringing down transaction failure rates since last year?
With the regulatory support, we now have multiple daily settlements including the weekends on all our systems including the card payments – the first of its kind in the world. This reduces settlement risks significantly and allows banks and others to put more volumes on NPCI systems. Last year, we saw an incredible increase in digital transactions. To manage this increased volume efficiently, NPCI, banks, with the dashboard published by Meity and the regulator have increased the capacity of core platforms. If you see month on month, the transaction failures have reduced substantially, and recent volume growth is proof of the pudding.
NPCI recently launched E-Rupi with the government of India. How is the live implementation of this service?
e-RUPI is a context-free, purpose-specific and person-specific solution. There could be many use cases that can leverage this new platform. The top 15 banks of the country have already enabled the workflows; however, the acceptance ecosystem will still have to be built. It reverses the standard UPI model of customers scanning the merchant QR code; here the merchant scans and thus needs the smart phone.
Cyber-attacks have been the biggest worry in the digital space. There have been some high-profile breaches of customer payment data. How is NPCI dealing with it?
This is a super critical issue for the ecosystem. This is something that keeps us worried and awake. Recently I read that India is becoming or has become the Ransomware capital of the world, and most of these demands are in crypto currencies. The regulator has recently delivered a strong “tokenisation framework” which reduces the risk to almost near zero for card payments, if the ecosystem adopts them effectively. While there may be some criticism that it may increase the consumer friction in short term, finally, if there is a large breach, the blame is always on the regulator. The question is who takes the liability, and how do we protect the customers from such breaches? We want all start-ups, irrespective of their size and risk appetites, to participate in payments to expand the market. But how does the regulator mitigate the risk than better technology implementation? As we all know, security standards and certifications are necessary but may not be adequate.
So does tokenization address it?
We at NPCI believe RBI’s initiative is a welcome step and with efficient implementation of tokenization, the customer experience and trust will actually increase. There is nothing to fear. I recall a similar situation when RBI decided to implement the 2-factor authentication in 2012. The entire industry was against the RBI and, in just a few years, everyone started praising the decision and now the world is adopting the same. Customer protection always involves tough actions which benefit the system in the long-run. The regulator must implement without hesitation and deal with short-term criticism.
What about security at NPCI itself?
We at NPCI ensure that robust and in-depth security standards are applied – from infrastructure to data security. We are gearing to implement this in RuPay in the next few days, and in addition the UPI with its inherent design offers safe and secure tokenization.
What is the rationale behind implementing the 30% market share cap rule for UPI? Even now two firms – PhonePe and GPay – are dominating 85% of the market. Will this be a problem?
The market share cap is implemented keeping in mind the concentration risk approach while ensuring that it doesn’t hinder the growth of UPI to the extent possible. We still believe the existing players such as Paytm, Amazon Pay and WhatsApp shall increase their market share in due course so that we don’t need to interfere or take any action to reduce or curtail the growth of UPI. Now, we also see that popular banks’ apps have been converted to full-fledged UPI apps (our long demand) example is iMobile, and we understand Yono and Payzapp shall enable soon. With these measures, we believe that the market share should balance itself out. We are actively consulting various players to increase their penetration in UPI. While digital is still at such a nascent stage, curtailing the UPI growth in the near future may not be in the best interests of the country. We still need huge growth in UPI, especially to enable the next 300 million users in the country who have smartphones and bank accounts, and the ecosystem efforts shall make it happen in the next 24 months.
The MDR was waived in 2020. What has been the impact on Rupay card issuances?
Majority of the MDR (charges from the merchants to accept digital payments) funds the acceptance or infrastructure deployment of those services. The network or the clearing house gets about 10 to 15% of these charges. This is the only source of revenue for the ecosystem to fund the increasing the acceptance infrastructure, superior customer service or protection, prudent cyber security investments and the upscale central IT infrastructure by the entire chain of players part of digital payments. We believe that reasonable MDR charges should be levied so that the digital ecosystem can expand and grow. RuPay and UPI, the home-grown systems are put to disadvantage to some extent due to this regulation.
Coming back to cyber attacks, how can RBI’s new rules on tokenization help?
What RBI is saying is – you can’t store. There is an acceptance ecosystem and issuance ecosystem and there is a network. What the RBI is saying is that apart from the network and issuer, nobody can save card details. Tokenization is something like an alias number for the card which can be stored by anyone. So even if there is a breach, the customer card data won’t be impacted. UPI on the other hand is already a tokenized system right from the design. For cards – the number is part of the authentication design. While it puts a short-term burden on the ecosystem so there will be criticism of the regulator, but we must look long term.
Has NPCI gone live with tokenization?
We have gone live with Jio and are in the process of going live with GPay. We have given the communication to the regulator that we will be ready for tokenization by 30th September and we will onboard our ecosystem before the RBI deadline of 31st December. Bank by bank we will have to certify our partners, which will be done.
The RBI has announced a Payments Infrastructure Development Fund (PIDF). How is the progress on the implementation of this?
It’s already operational. PIDF objective is to create an acceptance ecosystem in J&K and North East. Both POS and QR have different acceptance models. The question is whether demand comes first or supply. PIDF is aimed at fixing the supply side in tier 3 and beyond. PIDF is a big enabler to get the next 300 million into the digital journey. With increased smartphone penetration
What is the outlook on Bharat Bill Payment Systems?
We are very bullish on BBPS and good growth. We are building an ecosystem around BBPPs. There are Operating Units that are licensed by RBI. Around 15+ are licensed and we have over 15 more interested in becoming OUs. The ecosystem I think will grow around BBPS with banks, fintech and startups.
RBI is now reportedly mulling over deferring the New Umbrella Entity scheme. Would the introduction of NUE affect innovation being led by NPCI? How do you view competition in this space?
We have always shaped the market with localised innovation, and we shall continue to do so, with or without NUEs. We have been competing very hard with on card and mobile payments with international card schemes that are well entrenched in the world market. We or for that matter anybody cannot survive nor succeed without innovation and faster execution in such a fast-moving payment space.
NPCI’s design as of today is more like not for profit. Can NPCI compete with NUE which is likely to come up and operate on commercial terms?
RBI and the top banks (with support of IBA) in the country created NPCI as “public good” and nurtured and made this organisation reasonably successful selflessly. China appears to adopt what India did a decade back, but again every country has different objectives and agendas.
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Unified payments interface (UPI) transactions hit a new record high in volume as well as in value for the third straight month in August.
UPI saw 3.55 billion transactions worth Rs 6.39 lakh crore in August, which is a 9.6% increase in volume and 5.4% surge in value compared with July.
However, the pace of growth has slowed in August. In July UPI had notched a record 3.24 billion transactions, up 15% over June figures. UPI transactions were subdued in April and May due to Covid restrictions.
In August 2021
Transactions through Bharat Bill Pay stood at 58.88 million, worth Rs 10,307 crore in August, a growth of 15.15% in volume and 7.2% in value from July.
FASTag transactions were at 201.2 million and Rs 3,076 crore in value in August, a 4.61% rise in volume and a 3.36% surge in value compared with July.
Transactions through Immediate Payment Service were at 377.94 million in terms of volume and Rs 3.18 lakh crore in value in August, an 8.05% rise in volume and 3.03% surge in value when compared with July.
Pandemic push
Since the beginning of the year, UPI transactions have grown 54% from 2.3 billion in January.
Since its launch in 2016, the UPI crossed 1 billion transactions for the first time in October 2019, which more than doubled to over 2 billion transactions in October 2020. The growth exploded during the pandemic as more people opted for contactless payment.
However, the transactions have picked up since the beginning of the pandemic as more consumers opted for digital payment options. They had been rising steadily to top 5 trln rupees in March and then 6 trln rupees in July.
Last fiscal jump
UPI transaction volumes surged 43.2% in the first quarter of the last fiscal, 98.5% in the second quarter 104.6% in the third and 112.5% in the fourth quarter.
While IMPS volumes degrew 9.6% in Q1, they rose 26% om Q2. 40.5% in the third quarter and 42.9% in the fourth quarter.
National Automated Clearing House (NACH) volumes grew 32.8 in the first quarter, 13 in second, 0.9 in third while they degrew 10.2 in the fourth.
BBPS volumes grew 66% in Q1, 103.2 in Q2, 84.4 in Q3 and 102.7 in Q4 while National Electronic Toll Collection, the NHAI’s Fastag system logged 83.9 growth in Q1, 249.2 in Q2, 195 in Q3 and 75.3 in the fourth quarter.
On the other hand, RTGS volumes degrew 26.2 in Q1, logged 3.1 in Q2, 10.2 in third and 31.1 in the fourth quarter.
NEFT volumes degrew 3.9% in the first quarter, grew 9.8 in second, 23.2 in third, 17.8 in the fourth quarter.
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After ordering the freezing of assets of Videocon promoter Venugopal Dhoot and other officials, the National Company Law Tribunal (NCLT) has admitted a personal insolvency petition against Dhoot.
Earlier the Ministry of Corporate Affairs (MCA) received permission to freeze Dhoot’s assets.
Asish Narayan has been appointed as the resolution professional (RP) in the case by a division bench led by judicial member Suchitra Kanuparthi and a technical member Chandra Bhan Singh. The next date of hearing is 20 September.
Lenders to Videocon had filed the personal insolvency petition to attach Dhoot’s assets a year ago and its admission now means the recovery process will go on full steam. But it is unclear how the admission of personal insolvency proceedings will impact the NCLT’s order freezing Dhoot’s assets on the MCA plea.
State Bank of India (SBI) the lead lender in the consortium of bank creditors to has also taken Venugopal’s brothers and Videocon co-promoters Rajkumar Dhoot and Pradipkumar Dhoot under the personal bankruptcy law.
Rs 18,000 crore debt
Banks led by SBI are seeking to recover close to Rs 18,000 crore by initiating guarantees given by the Dhoot brothers at different points in time to access loans from banks. Claims from Venugopal Dhoot come to about Rs 6100 crore while two separate petitions have also been filed by SBI has to invoke Rs 6,158 crore of personal guarantee given by Pradipkumar Dhoot and Rs 5353 crore to be recovered from Rajkumar Dhoot which are yet to receive the NCLT go ahead.
These guarantees were given by them for a mix of term and working capital loans granted to the company over the years.
Cyril Amarchand Mangaldas is representing SBI in the case.
The way ahead
Now that NCLT has okayed the recovery process the RP will examine the application and submit his report stating the reasons for approval or rejection of the application within 10 days.
This process is different from the corporate insolvency process and the NCLT will determine going ahead with the personal insolvency based on the report of the RP.
In December over 94% of the creditors by value voted for Vendanta arm Twin Star Technologies as the preferred bidder to take over Videocon. Vedanta’s offer of a little over Rs 3,000 crore was a haircut of more than 95% on admitted claims of Rs 61,770 crore.
Other defaulting promoters
Banks have approached the National Company Law Tribunal for invoking personal guarantees of promoters of 17 defaulting companies.
The defaulting promoters include those of Punj Lloyd, Amtek Auto, ABG Shipyard, Videocon, Varun Shipping, and Lanco, according to reports.
Armed with a Supreme Court order, banks are looking to invoke personal guarantees of tycoons from Venugopal Dhoot to Kapil Wadhawan to recover unpaid loans from their delinquent firms
The guaranteed debt
According to an estimate, the top 10 personal guarantors have guaranteed debt of over Rs 1.6 lakh crore. Among the big names, former promoters of Bhushan Steel and Power Sanjay Singhal and his wife Aarti Singhal had furnished personal guarantees worth up to Rs 24,550 crore to take loans from a consortium of banks led by SBI.
The former promoter of Reliance Communications, Anil Ambani, has also given a personal guarantee against the loan taken. Erstwhile promoter Wadhawan stands guarantee to loans taken by DHFL, which is sitting on debt of about Rs 90,000 crore, while Dhoot has also given a personal guarantee to a portion of Rs 22,000 crore loan to Videocon.
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Planning
oi-Sneha Kulkarni
Any Indian citizen between the ages of 18 and 40 can join the APY through a bank or post office branch where they have a savings bank account.
From the age of 60, a subscriber would be eligible for a minimum guaranteed pension of Rs. 1,000 to Rs. 5,000 per month, based on his contribution. The same pension would be provided to the subscriber’s spouse, and if both the subscriber and the spouse died, the accrued pension wealth up to the age of 60 would be returned to the nominee.
During the current fiscal year 2021-22, more than 28 lakh new APY accounts were opened under the Atal Pension Yojana (APY), a government-run guaranteed pension system operated by PFRDA. As of August 25, 2021, the total number of APY enrolments had surpassed 3.30 crore.
| Sr. No. | Bank Name | Number of APY acc from April 1, 2021- Aug 24, 2021 |
|---|---|---|
| 1 | State Bank of India | 7,99,428 |
| 2 | Canara Bank | 2,65,826 |
| 3 | Airtel Payments Bank Limited | 2,06,643 |
| 4 | Bank Of Baroda | 2,01,009 |
| 5 | Union Bank of India | 1,74,291 |
| 6 | Bank Of India | 1,30,362 |
| 7 | Indian Bank | 1,13,739 |
| 8 | Central Bank of India | 1,04,905 |
| 9 | Punjab National Bank | 1,01,459 |
The system is administered by 266 registered APY Service-Providers, which include a variety of banks and the Department of Posts. Because this scheme is only open to applicants who have a savings bank account, PFRDA recommends all banks to promote it to their current and prospective clients on a regular basis.
In order to broaden the reach of the APY Scheme and benefit existing and potential APY subscribers as well as APY seers, PFRDA has recently undertaken new initiatives such as the addition of new features to the APY mobile App and its availability on the Umang platform, the updating of APY FAQs, the issuance of the APY Subscriber Information Brochure and the APY Citizen Charter in 13 regional languages.
During the current fiscal year, about 8 lakh new subscribers have joined the Atal Pension Yojana (APY) through the State Bank of India (SBI). By August 25, the number of APY subscribers has surpassed 3.30 crore, according to data issued by the Pension Fund Regulatory and Development Authority (PFRDA).
Top states having more than 10 lakh enrolments under the APY as on 25th August 2021 are:
| Sr. No | State Name | Number of APY enrolments |
|---|---|---|
| 1 | Uttar Pradesh | 49,65,922 |
| 2 | Bihar | 31,31,675 |
| 3 | West Bengal | 26,18,656 |
| 4 | Maharashtra | 25,51,028 |
| 5 | Tamil Nadu | 24,55,438 |
| 6 | Andhra Pradesh | 19,80,374 |
| 7 | Karnataka | 19,74,610 |
| 8 | Madhya Pradesh | 19,19,795 |
| 9 | Rajasthan | 16,16,050 |
| 10 | Gujarat | 13,50,864 |
| 11 | Orissa | 12,45,837 |
According to PFRDA data, public sector banks have the most APY users, with over 2.33 crore. Regional rural banks (61.32 lakh), private banks (20.64 lakh), small finance banks and payment banks (10.78 lakh), the Department of Posts (3.40 lakh), and cooperative banks came in second and third, respectively (84,627).
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The Reserve Bank of India on Wednesday imposed a monetary penalty of ₹25 lakh on private sector lender Axis Bank.
The penalty has been imposed for contravention of non-compliance with certain provisions of directions issued by RBI contained in the Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016, the RBI said.
RBI conducted scrutiny during February 2020 and March 2020 in a customer account maintained with Axis Bank. It was observed that the bank had failed to comply with the KYC directions and had failed to monitor/carry out on-going due diligence in the account to ensure that the transactions were consistent with its knowledge about the customer, customer’s business and risk profile.
“In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for contravention of the said directions,” the RBI said.
After considering Axis Bank’s reply to the notice and oral submissions made during the personal hearing, RBI concluded that the charge of contravention of / non-compliance with the directions were substantiated and warranted imposition of monetary penalty, it further said.
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