Axis Bank held a contest. But RBI isn't playing

livemint.com:

Mint has seen a copy of the Axis Bank contest announcement as well as relevant portions of the regulator's observations. “We are proposing a contest to build momentum, particularly in Q2 and Q3 — which is (the) most challenging period of the year — for the overall business and to motivate the sales team to deliver superlative performance during (the) contest period," an Axis Bank internal note said in October.

The contest was open for the wholesale and retail units of Bharat Enterprises, a part of Axis Bank's unit which serves rural customers. Citing an analysis, Axis Bank said that in one of the contests where 103 employees could have become eligible for rewards, the cost would be ₹75 lakh, while it was expected to earn incremental revenue and fees of ₹4.86 crore for the bank.

Similarly, in another contest, the bank concluded that by spending ₹15.75 lakh on 25 eligible employees, it could earn ₹2.7 crore in revenue and fees. However, RBI guidelines forbid lenders from offering incentives for raising deposits.

According to its 2016 directions on deposit rates, banks cannot “offer prize/lottery/free trips (in India and/or abroad), etc or any other initiative having (an) element of chance for mobilizing deposits". But they are free to give inexpensive gifts of not more than ₹250, at their discretion, to depositors at the time of accepting deposits.

“Scheduled commercial banks shall not pay any remuneration or fees or commission or brokerage or incentives on deposits in any form or manner to any individual, firm, company, association, institution or any other person except (in certain cases)," as per RBI regulations. These exceptions include commission paid to agents employed to collect door-to-door deposits under a special