The Reserve Bank of India (RBI), is contemplating a thorough overhaul of its penalty system. The possible adjustments might include raising the penalty amounts in accordance with the size of the regulated entities, their significance to the system, and the quantity of repeat violations according to a Business Standard report that cited a top regulatory source.
It added that the study might look into the possibility of taking back payments made to CEOs and other key management persons (KMP). This specific component could have a significant impact on state-run banks, whose remuneration packages have already been the subject of discussion when compared to those provided by private banks.
According to the report, there is also conjecture on the potential imposition of supplementary capital taxes on regulated firms.
The project is part of the apex bank's efforts to highlight the significance of corporate governance and raise standards for it inside regulated firms.
RBI Governor Shaktikanta Das spoke with the boards of state-run and private banks in May about concerns related to ethics, board roles, and supervisory standards. This is thought of as a continuation of that emphasis.
As a result of Axis Bank's noncompliance with the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016, the 'Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by Banks', and the 'Code of Conduct for Opening and Operating Current Accounts', the apex bank levied a monetary penalty of Rs 90.92 lakh on 16 November.
The Reserve Bank stated that it discovered that the Axis Bank had, in some cases, neglected to maintain records pertaining to the identity and address of its customers and had been making repeated calls to some of them after looking through the Risk Assessment Report/Inspection Report pertaining to ISE 2022, Scrutiny Report, and all related correspondence in that regard.