The market regulator, Sebi, on Thursday imposed a fine of Rs 5,000 on Axis Bank for violating Commercial Banks (MB) regulations. It goes back to between August 2016 and August 2019.
During this period, Axis Bank acted as a commercial bank for 22 debt issues launched by different companies. It was subscribed to the securities in nine such issues but failed to disclose the required.
Rule 27 of the MB Regulations governs a merchant banker to submit to Sebi
Full details of the transaction in connection with the acquisition of the securities of the legal person, whose issue the merchant bank manages, within 15 days from the date of entering into this transaction.
In its response to SEBI, Axis Bank said that the failure to report the acquisition of securities in the nine debt issues emerged during an internal audit and SEBI was promptly notified of the same. She further said that the prompt reporting of the omission demonstrated goodwill on her part. Axis Bank also told SEBI that it had taken the necessary corrective steps to avoid the recurrence of such lapses.
While acknowledging the steps the bank has taken, Sebi said one cannot “lose our minds to the fact that (Axis Bank)’s notice as a registered market broker has failed to comply with the
The obligation under the MB regulations for three consecutive years.
Axis Bank also tried to settle the matter under the approval mechanism but the captive did not approve it.