RBI Slaps Heavy Fine on Public Sector Bank, Penalises Four Other Institutions
RBI imposed heavy fines on a public sector bank and four institutions, Know why: The Reserve Bank of India (RBI) has imposed monetary penalties on several banks and non-banking financial companies for non-compliance with regulatory guidelines.
According to the central bank, penalties of ₹32.50 lakh have been levied on Bank of Maharashtra, ₹29.60 lakh on DCB Bank, and ₹63.60 lakh on CSB Bank. In addition, Navi Finserv has been fined ₹3.80 lakh, while IIFL Finance faces a penalty of ₹5.30 lakh. The entities have been directed to deposit the penalty amounts within the stipulated time frame.
The RBI stated that Bank of Maharashtra was penalised for failing to provide member-level data of Self-Help Group (SHG) members to credit information companies and for not properly identifying the actual beneficial owners of certain accounts. CSB Bank was found to have engaged business correspondents in activities beyond their authorised scope and did not adequately inform customers before levying certain charges on savings accounts.
DCB Bank was penalised for not adhering to the prescribed loan-to-value (LTV) ratio in some non-agricultural gold loan accounts. IIFL Finance was found to have failed to classify certain restructured loan accounts as non-performing assets (NPAs). Navi Finserv was penalised for contacting customers at inappropriate hours for loan recovery and not following prescribed communication protocols.
The RBI clarified that the penalties are based on regulatory deficiencies and are intended to ensure compliance and transparency in the financial system. The central bank regularly conducts inspections and takes action against institutions found violating norms.
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