IRDAI Fines IndusInd Bank ₹1 Crore Over Insurance Grievance Redressal Lapses

Key facts

• The Insurance Regulatory and Development Authority of India (IRDAI) imposed a ₹1 crore penalty on IndusInd Bank, acting as a corporate agent, for lacking an adequate insurance-specific grievance redressal mechanism for policyholders.
• The IRDAI order is dated September 10, 2026, and also records lapses relating to renewal notices, regulatory disclosures and the bank's website, which attracted caution and advisory rather than monetary penalty.
• IRDAI's onsite inspection in June 2023 found the bank had no dedicated mechanism for insurance policyholders to lodge complaints, and its grievance policy was designed mainly for banking customers.
• The regulator found the bank's toll-free number and IVR system did not provide an option for policyholders to lodge insurance-related grievances.
• Even after the bank claimed an enhanced mechanism, IRDAI's test of the complaint portal generated no acknowledgement number, SMS, or email after a complaint was lodged.
• IRDAI directed the bank to strengthen its grievance redressal mechanism so that every insurance complaint immediately generates an acknowledgement number.
• Renewal reminder SMS sent by the bank lacked required information under the post-sale code of conduct, such as the policyholder's duty to disclose changes affecting the policy.
• The bank's website did not adequately display its IRDAI corporate-agent registration number or disclose that it does not underwrite insurance risk or act as the insurer.