The Reserve Bank of India (RBI) has imposed a penalty of ₹61.95 lakh on Kotak Mahindra Bank Limited for non-compliance with multiple regulatory directions relating to basic banking services, business correspondent operations and credit information reporting.
In an order dated December 11, 2025, the RBI said the penalty was levied after the bank was found to have violated guidelines governing Basic Savings Bank Deposit Accounts (BSBDA), exceeded the permitted scope of activities through its Business Correspondents, and furnished inaccurate borrower data to Credit Information Companies, in contravention of the Credit Information Companies Rules, 2006.
The action follows the RBI’s Statutory Inspection for Supervisory Evaluation (ISE 2024), conducted with reference to the bank’s financial position as of March 31, 2024. Based on supervisory findings, the central bank issued a show-cause notice to Kotak Mahindra Bank, seeking an explanation for the identified lapses.
After examining the bank’s written submissions and oral representations, the RBI concluded that the charges were sustained. The violations included the opening of multiple BSBDA accounts for customers already holding such accounts, engaging Business Correspondents for activities beyond the scope permitted under RBI norms, and reporting incorrect credit information relating to certain borrowers to Credit Information Companies.
The RBI clarified that the penalty has been imposed solely for deficiencies in regulatory compliance and does not constitute a judgment on the validity of any transaction or agreement entered into by the bank with its customers. It added that the action is without prejudice to any other measures that may be taken against the bank under applicable laws.
Source: Reserve Bank of India – Press Release No. 2025–2026/1742, dated December 19, 2025.
