According to an order from the market’s regulator, the Securities and Exchange Board of India (SEBI) fined Axis Bank Rs 5 lakh on March 24 for breaking commercial banking regulations.
SEBI stated it investigated Axis Bank’s debt market activities from August 2016 to August 2019 and discovered the bank had violated Regulation 27 of the SEBI (Merchant Bankers) Regulations, 1992.
According to the market regulator, Axis Bank, whilst working as a merchant banker for 22 businesses for 3 years, subscribing to debt papers of 9 companies not telling SEBI regarding the same 15 days from the investment date, as seems to be the norm.
Dewan Housing Finance, Reliance Home Finance, Indiabulls Housing Finance, ECL Finance, Shriram Transport Finance, L&T Finance, and Tata Capital Finance were among the non-banking finance businesses whose securities Axis Bank bought whilst operating as a merchant banker and not informing SEBI.
The bank claimed that this was an unintentional infringement that it had disclosed to SEBI ahead of time and that it was taking immediate steps to prevent future infractions. “We request forbearance in the matter and request for personal hearing to explain the above in detail,” the lender’s answer to SEBI read.
“Any investor reported no loss or prejudice on account of the inadvertent omission of the Notice (Axis Bank) to inform SEBI regarding its participation in 9 out of 22 issues. In the light of the above and considering the proactive manner in which it sought to rectify the omissions, the Noticee submits that it ought to be given the benefit of the doubt and discharged from the present proceedings,” the plea of the lender with SEBI read.
Axis Bank was granted a personal hearing by SEBI and the lender and submitted its position to the regulator through its lawyers. Axis Bank then said it had chosen to resolve the case by applying with the regulator. The SEBI, on the other hand, rejected the settlement request and directed Axis Bank to furnish additional information in the matter.