The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.12 crore on Bank of Maharashtra (BoM) for non-compliance with certain directions issued by the Reserve Bank of India relating to Know Your Customer (KYC), reporting of data to the Central Repository of Information on Large Credits (CRILC), and outsourcing of financial services.

In a statement, RBI said the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

RBI had conducted a statutory Inspection for Supervisory Evaluation (ISE) of the bank with reference to its financial position as on March 31, 2020.

Also, scrutiny was conducted in the matter of non-credit of customs duty to the Government Account by the bank, according to the statement.

The examination of the Risk Assessment Report & Inspection Report pertaining to the ISE, scrutiny reports and all the correspondence related to the same, revealed, inter-alia, non-compliance with the directions issued by RBI, it added.

Non-compliance with the directions was to the extent the bank (i) failed to allot Unique Customer Identification Codes (UCIC) to its individual customers, (ii) failed to ensure integrity and quality of data submitted to RBI in CRILC, and (iii) did not enter into any Service Level Agreement (SLA) and failed to review the outsourcing arrangement for one of the outsourced financial services, the central bank said.

A notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions.

“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty to the extent of non-compliance with such directions,” the RBI statement said.

Published on April 25, 2022