RBI Crackdown: Fines Imposed on 6 Banks for Rule Violations – Is Your Bank on the List?

The Reserve Bank of India (RBI) has taken strong measures against six banks, including one prominent private sector bank, for failing to comply with regulatory guidelines. Penalties totaling several lakhs of rupees have been imposed, highlighting lapses in KYC, governance, and operational processes.

Key Details of the Penalty

1. Private Sector Bank – RBL Bank

• Fine Amount: ₹61.40 lakh
• Violations:
  • Failure to obtain valid KYC documents while opening credit card accounts.
  • Issued multiple customer IDs instead of unique ones.

2. Gujarat Co-operative Banks

• Amod Nagarik Sahakari Bank Limited (Bharuch):

  • Fine: ₹1 lakh
  • Violations:
    • Loans approved with directors’ relatives as guarantors.
    • Delay in uploading KYC reports to the Central KYC Registry.

• Karjan Nagarik Sahakari Bank Limited (Vadodara):

  • Fine: ₹2.10 lakh
  • Violations:
    • Failed to transfer unclaimed funds to the Depositor Education and Awareness Fund.
    • Did not maintain the minimum Cash Reserve Ratio.
    • Lapses in credit reporting and risk-based KYC updates.

• Rajula Nagarik Sahakari Bank Limited (Amreli):

  • Fine: ₹1.25 lakh
  • Violations:
    • Approved credit lines with directors’ relatives as guarantors.
    • Did not classify inactive accounts as required.

• Vijay Commercial Co-operative Bank Limited (Rajkot):

  • Fine: ₹1 lakh
  • Violations:
    • Failure to review risk classifications of accounts periodically.

3. Sundargarh District Central Co-operative Bank (Odisha)

• Fine Amount: ₹3 lakh
• Violations:
  • Loans were sanctioned to directors.
  • Delay in transferring unclaimed amounts to the appropriate fund.
  • Lapses in due diligence for new accounts.

Why These Fines Matter

The RBI’s actions emphasize the need for strict compliance with banking norms, particularly around KYC, risk management, and customer data handling. Such penalties serve as a warning to ensure accountability and maintain trust in the financial system.

Is Your Bank Affected?

If you have accounts in any of these banks, there is no need to panic. These penalties target procedural lapses, not customer funds. However, customers should stay informed and ensure their KYC details are updated to avoid disruptions.

Check with your bank to ensure compliance and monitor your account statements for any irregularities.