RBI imposed fines on few banks for various non-compliances: Check complete details here

The Reserve Bank of India (RBI) issued monetary fines of differing degrees to ESAF Small Finance Bank, Dhanlaxmi Bank, Punjab and Sind Bank on January 12 for various non-compliances.

According to the official announcement, the three banks have been fined 29.55 lakh, 6 lakh, and 1 crore, respectively.

Dhanlaxmi Bank has been fined Rs. 1.20 crore by the Reserve Bank of India (RBI) for failing to adhere to specific guidelines regarding 'Loans and Advances: Statutory and Other Restrictions,' Know Your Customer (KYC) procedures, and certain regulations concerning deposit interest rates.

The RBI stated that this penalty has been imposed under its authority as granted by the provisions of Section 47A(1)(c) in conjunction with Section 46(4)(i) of the Banking Regulation Act, 1949.

Further, a fine of Rs. 1 crore has been imposed on Punjab and Sind Bank for non-compliance with specific guidelines on 'Loans and Advances: Statutory and Other Restrictions'.

In addition, the central bank fined ESAF Small Finance Bank Rs. 29.55 lakh for failing to follow its guidelines for 'Customer Service in Banks'.

The RBI stated that the actions against these institutions were based on noncompliance with regulations and were not meant to rule on the legality of any agreements or transactions the bank may have had with its clients.

Earlier on January 11, the RBI decided to lift the Rs. 5 crore fine that had been levied against Bank of Baroda (BOB), a state-owned lender, because there had been insufficient repayments of soiled notes.

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BOB reported on December 22, 2023, that the Reserve Bank has penalized the lender 5 crore. The penalty was imposed due to a shortage in soiled note remittances, which indicated problems with managing notes that had incurred normal wear and tear.