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RBI penalises Federal Bank and Bank of India for violating its regulations

RBI penalises Federal Bank and Bank of India for violating its regulations

The RBI has also penalised Dhani Loans and Services for non-compliance with its KYC directions.

Reserve Bank of India Reserve Bank of India

The Reserve Bank of India (RBI), on Friday, imposed a monetary penalty of Rs 5.72 crore on Federal Bank Ltd., Rs 70 lakh on Bank of India and Rs 7.60 lakh on Dhani Loans and Services Ltd. for violating the provisions of its regulations.

RBI imposed a monetary penalty on Federal Bank Ltd. for non-compliance with the provisions of its guidelines on financial services provided by banks. “The Reserve Bank of India (RBI) has, by an order dated July 7, 2022, imposed a monetary penalty of Rs 5.72 crore (Rupees Five crore and seventy-two lakh only) on Federal Bank Ltd. (the bank) for non-compliance with the provisions of ‘Reserve Bank of India (Financial Services provided by Banks) Directions, 2016’ issued by RBI. This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949,” it said in a public statement.

On the other hand, the country’s central bank imposed a monetary penalty, by an order dated July 7, 2022, on the Bank of India for non-compliance with certain provisions of its Know Your Customer (KYC) guidelines.  

“The Reserve Bank of India (RBI) has, by an order dated July 7, 2022, imposed a monetary penalty of ₹70 lakh (Rupees Seventy lakh only) on Bank of India. (the bank) for non-compliance with certain provisions of the ‘Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016’ and circular instructions on ‘Compliance Function in Banks’ issued by RBI. This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) and Section 51 (1) of the Banking Regulation Act, 1949,” the banking regulator said.

The RBI has also penalised Dhani Loans and Services for non-compliance with its KYC directions. “The Reserve Bank of India (RBI) has, by an order dated July 06, 2022, imposed a monetary penalty of Rs 7.60 lakh (Rupees Seven lakh and sixty thousand only) on Dhani Loans and Services Limited, Gurugram (the company) for non-compliance with the "Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016” issued by RBI. This penalty has been imposed in exercise of powers vested in RBI under the provisions of clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58 B of the Reserve Bank of India Act, 1934,” the statement reads.

RBI’s these penalties are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, it noted.