Money & Banking

With ₹1-cr fine on Bank of Maharashtra, RBI cracks the whip on three lenders this month

Our Bureau Mumbai | Updated on January 16, 2019 Published on January 16, 2019

 

The Reserve Bank of India (RBI) is increasingly cracking the whip on financial intermediaries for regulatory violations. The central bank, on Wednesday, said it has imposed a monetary penalty of ₹1 crore on Pune-headquartered Bank of Maharashtra (BoM) for non-compliance with the Master Directions on Frauds - Classification and Reporting and Master Direction on Know Your Customer (KYC) norms. BoM is the third financial intermediary – the other two being Citibank and Bajaj Finance – on whom a monetary penalty has been imposed by the banking regulator this month.

In the case of BoM, the central bank said: “This penalty has been imposed in exercise of powers vested in the RBI under the provisions of …the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by the RBI.

“This 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.”

On January 12, the RBI, in a statement, said it has imposed a ₹3-crore monetary penalty on Citibank NA India for deficiencies in compliance with its instructions on ‘Fit and Proper’ criteria for directors of banks.

On January 14, the RBI, in a statement, said it has imposed a monetary penalty of ₹1 crore on Bajaj Finance for violation of Fair Practices Code applicable to non-banking finance companies (NBFCs) as outlined in its master directions for NBFCs.

As per the RBI’s latest annual report, between July 2017 and June 2018, its enforcement department undertook action against 14 banks (including a payments bank and small finance bank) and imposed an aggregate penalty of ₹102.40 crore.

Published on January 16, 2019
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