Sebi fines Axis for violation of i-banking rules

Bombay : The Securities and Exchange Board of India (Sebi) on Thursday imposed a fine of 5 lakh on Axis Bank Ltd for breaching the regulator’s Merchant Bankers (MB) regulations while handling certain government debt sales.

The case relates to the period 2016-2019, when the private bank handled the debt issues of 22 companies.

Among these, Axis Bank had acquired shares in nine public issues, including Dewan Housing Finance Corp. Ltd, Indiabulls Housing Finance Ltd, Reliance Home Finance Ltd, L&T Finance Ltd, Tata Capital Finance Ltd, ECL Finance Ltd, Shriram Transport Finance Ltd.

Sebi said that Axis Bank violated Article 27 of the MB regulations which stipulates that every investment banker must submit to him all the details of the transactions relating to the acquisition of securities of the legal person, whose securities are managed by the investment banker within 15 days from the date of the transaction.

Axis Bank failed to provide this information, following which legal proceedings were initiated against the bank, the Sebi order said.

In its submission to the regulator, Axis Bank argued that during an internal assessment of its debt capital markets department, non-disclosure of securities acquisitions in nine debt issues was discovered, and the bank l immediately reported to Sebi.

The bank further said it mentioned that reporting the omission to Sebi promptly as its internal audit department noticed the irregularity showed its good faith intentions. He said no loss or harm was caused to any investor due to his inadvertent omission.

The bank had attempted to settle the matter; however, Sebi rejected the proposal.

In its order, the market regulator said it could not lose sight of the fact that the bank, as a registered market intermediary, had failed to comply with its obligation under the regulations MB for three consecutive years.

To subscribe to Mint Bulletins

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Download the app to get 14 days of unlimited access to Mint Premium absolutely free!