The Reserve Bank of India (RBI) has continued its regulatory enforcement spree into May, imposing significant penalties on three major banks for violating various compliance norms. The central bank, in an official statement released on Friday, confirmed that the infractions relate primarily to KYC (Know Your Customer) and KCC (Kisan Credit Card) guidelines.
Hefty Fines on IDBI, Bank of Maharashtra, and Bank of Baroda
The RBI has levied fines of:
- ₹31.80 lakh on IDBI Bank
- ₹31.80 lakh on Bank of Maharashtra
- ₹61.40 lakh on Bank of Baroda
These penalties stem from findings made during an inspection conducted on March 31, 2023, which revealed various compliance shortcomings. Following the inspection, RBI issued show-cause notices to each of the banks. After reviewing their responses and conducting further inquiry, the regulator proceeded with monetary penalties.
What Rules Were Broken?
- Bank of Baroda failed to ensure that employees working in the insurance corporate agency business were not incentivized with non-cash benefits. Additionally, the bank did not credit interest in a timely manner to certain inoperative/dormant/frozen savings accounts.
- Bank of Maharashtra did not fully comply with regulatory requirements concerning OTP-based Aadhaar e-KYC for deposit accounts opened through non-face-to-face channels.
- IDBI Bank was found charging an interest rate higher than permissible on certain Kisan Credit Card (KCC) accounts.
Will This Impact Customers?
Despite the penalties, the RBI has clarified that the action is administrative in nature and intended solely to enforce compliance. It does not affect the validity of any customer transactions or banking agreements.
So, if you hold an account with any of these banks, there’s no cause for concern — your access to services and your funds remain unaffected.