The Reserve Bank of India (RBI), in an order dated October 1, 2025, has levied a monetary penalty of Rs 31.8 lakh on American Express Banking Corp for non-compliance with the RBI (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.

The RBI’s Inspection for Supervisory Evaluation (ISE 2024), referencing the bank’s financial position as of March 31, 2024, revealed lapses, and a show-cause notice was issued. After considering the bank’s reply, additional submissions, and oral presentations, RBI found that the bank failed to reverse credit balances for certain credit cardholders arising from refunds, failed, or reversed transactions.

RBI clarified that the action is limited to regulatory compliance deficiencies and does not affect the validity of any transactions or agreements. The penalty is without prejudice to any further action that RBI may take against the bank.