RBI imposed heavy fines on Yes Bank and ICICI Bank, impact on shares was visible

Reserve Bank of India (RBI) has imposed heavy fines on two big private sector banks. According to the banking regulator RBI, Yes Bank and ICICI Bank were not following many rules. Therefore, a fine of Rs 91 lakh has been imposed on Yes Bank and Rs 1 crore on ICICI Bank.

RBI said on Monday that Yes Bank violated the guidelines related to internal and office accounts along with customer service. In many cases, the bank collected charges from multiple accounts due to insufficient balance. Also, illegal activities were taking place from internal and office accounts.

During its investigation, RBI discovered that Yes Bank had repeated this action in 2022. The bank created a few internal accounts in its clients' names to hold funds and handle client transactions. In addition to being unethical and illegal, this undermined consumer confidence.

ICICI Bank was found by RBI to have violated loan and advance policies. The largest victim of this will be this private bank, which will have to pay a fine of Rs 1 crore. When approving the loan, ICICI Bank exhibited egregious negligence. After conducting a limited investigation, he granted the loan. This raised the bank's financial risk or the chance of a loan default.

The banking regulator, in its investigation, found that this was not common knowledge; the bank had approved loans for many projects without analyzing their feasibility and loan repayment capacity.

The effect of RBI's action was also visible in the shares of both banks. Yes Bank shares were trading at Rs 22.80, down more than 1 percent on BSE in early trade. At the same time, ICICI Bank was trading at 1,126.95 with a decline of 0.28 percent.