Bank of India and Bandhan Bank Face Penalties from RBI

Bank of India has been fined ₹1.40 crore by the Reserve Bank of India (RBI) for failing to follow certain directives from the national bank

Bank of India is penalized
Bank of India has been fined ₹1.40 crore by the Reserve Bank of India (RBI) for failing to follow certain directives from the national bank. The main non-compliance areas are as follows:

Interest Rate on Deposits
Bank Customer Service Interest Rates on Advances
Credit Information Companies (CICs) – Reporting Membership in the Central Repository of Information on Large Credits (CRILC)
Violating the Credit Information Companies Regulations of 2006
In its Statutory Inspection for Supervisory Evaluation (ISE) of the bank, the RBI discovered instances of non-compliance with reference to the bank’s financial situation as of March 31, 2022, and March 31, 2021.

Read also:-Kiran Mazumdar-Shaw denounces the ‘Pink Tax’ as “shameful gender bias”

Particular Non-Compliance Problems
Not paying interest at the stated rates on some term deposit accounts
charging for SMS alerts based only on erroneous phone numbers rather than real usage
not resetting interest rates on external benchmark-linked advances and MCLR at the required intervals
not using external benchmarks to compare the interest rates on some floating rate retail and MSME loans
not reporting to CRILC or submitting data about some significant borrowers in an incorrect manner
not providing Credit Information Companies (CICs) with accurate information
Following the issuance of a show-cause notice by the RBI to the bank, the central bank determined that the allegations were maintained and that a monetary penalty should be imposed after taking into account the bank’s response, oral representations, and supplementary submissions.

Bank Bandhan Penalty
In addition, Bandhan Bank has been fined ₹29.55 lakh by the RBI for failing to follow specific guidelines regarding the interest rate on deposits.

Indostar Capital Finance faces a penalty
In addition, the RBI fined Indostar Capital Finance ₹13.60 lakh for failing to follow guidelines for the “Monitoring of Frauds in NBFCs” and specific “Know Your Customer (KYC)” requirements.

Compliance and Regulatory Action
The RBI has made it clear that the measures are focused on regulatory compliance violations rather than any judgments about the legality of any agreements or transactions the banks have with their clients. The issue of monetary penalties does not preclude the RBI from taking further action against the firms.
The RBI’s dedication to guaranteeing stringent adherence to regulatory requirements and upholding the integrity and stability of the banking and financial system is demonstrated by these sanctions.