RBI has always taken strict action when rules are violated. A major action was taken on 5 June. 3 banks have been fined. A company has also been fined. Let us know why the central bank decided to impose a penalty?
RBI Action: Reserve Bank of India has imposed heavy monetary penalty on two banks of Maharashtra and one of Telangana. In this regard, RBI has also issued a notification on Thursday, June 5. They are accused of not complying with the rules related to KYC and loans properly. RBI has decided to impose penalty only after the allegations were confirmed during the investigation. Apart from this, a non-banking finance company has also been fined.
During an inspection conducted on March 31, 2024, RBI came to know that the banks were not complying with the guidelines properly. After which a show cause notice was issued. Further investigation continued. In view of the response received on the notice from the bank and other oral presentations, it was decided to impose monetary penalty. However, this will not affect the transaction or any agreement between the customers and the customer.
Fine imposed on these banks and companies
- Adilabad District Co-operative Central Bank Limited, Telangana – Rs 1 lakh
- Ratanchand Shah Sahakari Sahakari Bank Limited, Mangalveda, Maharashtra – Rs 2 lakh
- Purnavadi Nagarik Sahakari Bank Limited, Beed, Maharashtra – Rs 1 lakh
- Paymi India Financial Services Private Limited – Rs 2 lakh
Banks violated these rules
This bank based in Maharashtra violated some guidelines issued on KYC and SAF. Offered higher interest rates on deposits than the interest rates issued by the State Bank of India. Violated the single borrower risk limit applicable for new loans and advances in some cases by not following the rules issued under SAF. Apart from this, instead of a unique customer identification code for each individual customer, some customers were allotted multiple identities.
The bank had sanctioned some gold loans in excess of the prescribed limit of LTV ratio. Apart from this, it was also unable to upload the KYC records of some customers on the Central KYC Record Registry within the stipulated time. Apart from this, Adilabad District Co-operative Central Bank Limited sanctioned the related loans of the directors.
Why was the company fined?
Paymi India Financial Services Private Limited accepted public deposits in violation of the guidelines related to COR. Apart from this, it did not take prior written permission from RBI to change the shareholders more than 26 percent of its paid-up equity capital.
