The Reserve Bank of India (RBI) has imposed a penalty of Rs 5 crore on Axis Bank for violation of certain provisions of directions issued by the Central Bank, including on cyber security framework. The penalty has been imposed for "contravention of/non-compliance" with certain provisions of directions issued by the RBI.

The action, Reserve Bank clarified, was based on the deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction. The fine was imposed on the bank on the basis of a scrutiny carried out by RBI in the backdrop of a fraud and related transactions, which was submitted by the bank to the regulator in June 2020. The contraventions were found by the regulator during the inspections.

The RBI said the statutory inspections for supervisory evaluation (ISE) of the bank were conducted with reference to its financial position as on March 31, 2017, March 31, 2018, and March 31, 2019. Notices were 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 directions

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