ICICI Bank incurs a ₹75 lakh fine from the RBI
The Reserve Bank of India (RBI) has imposed a penalty of ₹75 lakh on ICICI Bank in August 2025, following a Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank's financial position as of March 31, 2024. The penalty is in relation to two main issues: "Valuation of Properties - Empanelment of Valuers" and "Opening of Current Accounts by Banks - Need for Discipline."
The RBI found that ICICI Bank failed to carry out property valuations through independent valuers for certain mortgage loan cases, violating the direction requiring unbiased and independent property valuation. The bank also opened and/or maintained certain current accounts in violation of existing regulatory guidelines, indicating breaches in the prescribed discipline regarding account opening and maintenance.
The RBI initiated the penalty process by issuing a show-cause notice to the bank, asking it to explain why the penalty should not be imposed. After reviewing ICICI Bank's written explanations, additional submissions, and oral arguments during a personal hearing, the RBI concluded that the violations warranted monetary action under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
It is important to note that the penalty was imposed solely on account of regulatory compliance failures. The action does not affect the validity of any transactions or agreements entered into by the bank with its customers. The RBI also clarified that this penalty does not preclude further supervisory or enforcement actions against the bank in the future if needed.
This penalty comes after another RBI penalty of ₹97.8 lakhs imposed on ICICI Bank in May 2025 for breaches related to cyber security, KYC, and card issuance practices, highlighting ongoing regulatory compliance challenges for the bank.
In summary, the August 2025 RBI penalty on ICICI Bank reflects enforcement to ensure compliance with standards on property valuation through empaneled independent valuers and disciplined opening and maintenance of current accounts, aiming to uphold banking regulatory integrity and risk management.
- ICICI Bank's business operations, particularly in the areas of property valuation and current account opening, are under scrutiny following the RBI's imposition of a subscription-based penalty.
- The banking sector, including ICICI Bank, must adhere to regulatory guidelines, such as using independent valuers for property valuation and maintaining discipline in account opening and maintenance, as stipulated by the RBI and outlined in ISE 2024.
- The finance industry, including stock markets and businesses, should take note of continued RBI enforcement actions, such as the penalty imposed on ICICI Bank in August 2025, for maintaining the integrity of banking and risk management practices.
- In the broader context of ongoing regulatory challenges, the RBI's penalty on ICICI Bank for violations in 2024 and 2025 is a reminder for banks to focus on compliance with, not just cyber security, KYC, and card issuance practices, but also other critical areas such as property valuation and account management.
