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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1,31,80,000 (Rupees One crore thirty-one lakh eighty thousand only) on Punjab National Bank (PNB) for non-compliance with certain directions on Loans and Advances – Statutory and Other Restrictions and Know Your Customer (KYC) Directions, 2016. The penalty has been levied under the powers conferred to RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
The penalty follows findings from the Statutory Inspection for Supervisory Evaluation (ISE 2022), conducted with reference to the bank’s financial position as of March 31, 2022. Based on the inspection, RBI issued a show cause notice to PNB, highlighting non-compliance with regulatory directions.
Upon considering the bank’s written and oral submissions, RBI found that:
PNB sanctioned working capital demand loans to two State Government-owned corporations against amounts receivable from the government by way of subsidies, refunds, or reimbursements. The bank failed to preserve records related to customer identification and address verification for certain accounts.
RBI clarified that the penalty is based on deficiencies in regulatory compliance and does not comment on the validity of any transactions or agreements between the bank and its customers. The imposition of the penalty is without prejudice to any other regulatory or supervisory action that RBI may initiate against the bank.
[RBI]