The licensing conditions are stipulated by the Reserve Bank of India (RBI) at the time of issuing the banking licence. “The bank reported having undertaken the activity of rolling out mutual fund units, pension and insurance products and portfolio management services without obtaining the prior approval of RBI,” the central bank said.

On January 18, 2018, the RBI had issued a notice to the bank and “after considering the bank’s reply and oral submissions, RBI came to the conclusion that the aforesaid charge warranted imposition of monetary penalty,” it said. “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the RBI added.