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The Reserve Bank of India (RBI) has imposed monetary penalties on several banks for non-compliance with regulatory directions and provisions under the Banking Regulation Act, 1949.
On June 29, 2022, RBI imposed a penalty of ₹2 lakh on Dhakuria Cooperative Bank Ltd., Kolkata, West Bengal, for violations of exposure norms and statutory restrictions applicable to urban co-operative banks, along with non-adherence to Know Your Customer (KYC) guidelines. An inspection based on the bank’s financial position as of March 31, 2020, revealed the non-compliance, and after considering the bank’s responses and additional submissions, RBI concluded that the penalty was warranted.
On the same date, IndusInd Bank Ltd. was penalised with ₹1 crore for non-compliance with KYC directions, 2016. The statutory inspection revealed that the bank failed to follow Customer Due Diligence (CDD) procedures for accounts opened using OTP-based e-KYC in a non-face-to-face mode. In certain accounts, the aggregate of all credits in a financial year exceeded ₹2 lakh, and some fixed deposits exceeded prescribed limits. RBI found the charges substantiated after reviewing the bank’s replies and oral submissions.
Additionally, Kotak Mahindra Bank Ltd. was levied a penalty of ₹1.05 crore for contraventions under Section 26A of the Banking Regulation Act, 1949, and for non-compliance with RBI directions relating to customer protection in unauthorized electronic banking transactions, Depositor Education and Awareness Fund obligations, and statutory restrictions on loans and advances. The inspection covering the financial positions as on March 31, 2018, and March 31, 2019, revealed delayed credit to the Depositor Education and Awareness Fund, failure to reverse amounts involved in unauthorized electronic transactions within the stipulated time, and incorrect application of margin on advances to stockbrokers.
Finally, the RBI imposed a penalty of ₹10 lakh on The Tiruchengode Co-operative Urban Bank Ltd., Tamil Nadu, for non-adherence to exposure norms and statutory restrictions applicable to urban co-operative banks, as well as KYC guidelines. The inspection as of March 31, 2020, confirmed the violations, and the penalty was imposed after considering the bank’s replies and personal hearing submissions.
These actions reflect RBI’s continued focus on ensuring regulatory compliance and strengthening governance in the banking sector. The penalties are based on deficiencies in compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.
[RBI]